Qantas expects profit to drop up to 90 percent

Published:  5 Jun at 6 PM

Qantas has announced that it expects profits to drop by as far as 90 percent with its highest fuel bill on record and further losses in its global operations. It has predicted a pre-tax profit of between A$50 million and A$100 million for the year finishing June 30.

This is down from a pre-tax profit of A$552 million during the same time a year earlier. The company’s shares fell as much as 18 percent after the profit warning on the Australian Securities Exchange.

Qantas released a statement saying the forecast result showed the recent decline in international aviation operating conditions exacerbated by the firm’s highest ever fuel bill, the EU economic crisis, and high capacity increases within the domestic market which have slashed yields.

The firm said that fuel prices for the period will likely rise to A$4.4 billion, a jump of around A$700 million from the same time one year earlier.

International operations has been one huge concern for Qantas during the past few years. The department has been damaged by higher costs of operation as well as lowering demand in its principal markets.

The company said that division losses were expected to double to A$450 million during the fiscal year ending June 30.