Arab Today, arab today qantas warns of loss shares hit record low
Last Updated : GMT 20:13:35
Arab Today, arab today
Arab Today, arab today

Qantas warns of loss, shares hit record low

Arab Today, arab today

Arab Today, arab today Qantas warns of loss, shares hit record low

Sydney - Agencies

Australia’s Qantas Airways warned of its first annual net loss since it was privatised in 1995, blaming deep losses at its international operations, weak travel demand and soaring fuel costs, sending its shares down by a fifth to a record low. The forecast comes two weeks after Qantas unveiled a plan to separate its bleeding international business from its profitable domestic unit, and follows a bruising 12 months wrangling with unions that led to the grounding of its fleet for nearly two days last year. Chief Executive Alan Joyce, whose turnaround plan and handling of the unions has won shareholder plaudits, said the past few weeks had been particularly harsh, forcing the airline to warn investors. “A very disappointing forecast. It just highlights the size of losses and problems with the international business and justifies Joyce’s move to split the group,” said David Liu, Head of research at ATI Asset Management, which owns Qantas shares. “Having said that, I take a lot of positives from the initiatives to cut costs, capex. It shows the management understands the macro economic environment and is doing everything it can to mitigate it.” Joyce said Qantas would post a net loss for 2011/12. He forecast underlying profit before tax would slide as much as 90 percent to A$50 million ($48.6 million) to A$100 million, while the airline will incur A$380 million in restructuring costs – half the statutory level. The latest underlying profit forecast compared with A$522 million a year ago and was well below analysts’ expectations of A$285 million. The Qantas plan to separate its international and domestic divisions has sparked speculation a foreign carrier could buy a stake in the airline, with a recent Deutsche Bank research note suggesting Emirates could invest in the domestic arm.  Joyce has told media that reports of Emirates taking an equity stake are wrong. Separately, Abu Dhabi’s flagship carrier Etihad Airways said it had bought 4 percent of Qantas’ domestic rival Virgin Australia Holdings and aimed to build its stake to 10 percent. Etihad has a strategic alliance with Virgin Australia and the Gulf carrier’s chief executive James Hogan ruled out any move to buy a stake in Qantas. The airline’s profit warning underlines the global aviation sector’s struggles as high oil prices and sagging demand due to the European economic crisis take their toll. The International Air Transport Association has downgraded its forecast for airline profits in 2012 to $3 billion from $3.5 billion, and has said sharp rise in oil prices could lead to losses as high as $5.3 billion for the sector. Qantas said its international business was set to more than double its loss in earnings before interest and tax (EBIT) to over A$450 million in the year to June 2012, compared with a A$216 million loss a year ago. Earnings for its domestic unit and low cost offshoot JetStar were seen at over A$600 million. “We are attacking costs and allocating aircraft and capital efficiently. Over A$300 million in annual benefits have been identified from the changes we are making,” said Joyce, who aims to return the international business to profit by 2014. Turnaround plan Irish-born Joyce, 45, took over as Qantas CEO in 2008 after stints at its low-cost offshoot JetStar and the now defunct Ansett Australia. He was named the nation’s most influential business leader by the Australian newspaper earlier this year after his battle with unions. Joyce has embarked on a five-year turnaround plan and announced 1,000 job cuts. The world’s second-oldest airline is shrinking its engineering and maintenance centres and cutting A$900 million in capital expenditure to protect it from economic turmoil and safeguard its investment grade rating. Qantas, which has retired most of its old aircraft, said it had a cash balance of more than A$3 billion, an undrawn standby facility of A$300 million, and the flexibility to further cut capital investment if the need arises. Group underlying fuel costs were seen reaching A$4.4 billion in the year, up about $700 million on last year. Last month, the airline said the domestic and international businesses will have their own CEOs and financial results though the group will remain a single entity. A spin-off or sale of the international unit is viewed as unlikely by analysts, given its key role as a passenger feeder to the domestic operations. A sale or a significant stake sale in the business would also need changes to legislation which is designed to protect Qantas’ position as an Australian airline. Qantas shares ended down 18.7 percent at $1.155.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today qantas warns of loss shares hit record low Arab Today, arab today qantas warns of loss shares hit record low

 



Arab Today, arab today
Arab Today, arab today Reveals his participation in "Fashion Star" TV show

GMT 12:49 2017 Wednesday ,01 March

Reveals his participation in "Fashion Star" TV show
Arab Today, arab today Tabarka beauty between sea, mountain

GMT 06:37 2017 Wednesday ,01 March

Tabarka beauty between sea, mountain
Arab Today, arab today Sheds light on major steps in 12-year career

GMT 06:07 2017 Monday ,27 February

Sheds light on major steps in 12-year career
Arab Today, arab today Russia, China veto UN resolution

GMT 07:27 2017 Wednesday ,01 March

Russia, China veto UN resolution
Arab Today, arab today NUMP's conference to discuss proplems

GMT 13:40 2017 Wednesday ,01 March

NUMP's conference to discuss proplems
View News in Arabic - Business: أسواق مالية
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Parliament considers solutions to overpopulation

GMT 20:27 2017 Monday ,27 February

Parliament considers solutions to overpopulation
Arab Today, arab today Lasers flesh out dino-bird profile

GMT 12:24 2017 Wednesday ,01 March

Lasers flesh out dino-bird profile
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Final Phantom VII signals end of an era

GMT 14:31 2017 Tuesday ,28 February

Final Phantom VII signals end of an era
Arab Today, arab today 'Constructive' Vauxhall talk with union

GMT 08:54 2017 Saturday ,25 February

'Constructive' Vauxhall talk with union
Arab Today, arab today Najla Badr will participate in “30 Days” drama

GMT 06:23 2017 Monday ,27 February

Najla Badr will participate in “30 Days” drama
Arab Today, arab today Humans spark most US wildfires

GMT 14:58 2017 Tuesday ,28 February

Humans spark most US wildfires

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years

GMT 11:44 2017 Saturday ,25 February

Penguins in the age of dinos

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"

GMT 07:54 2017 Wednesday ,01 March

Shanghai expands public smoking ban

GMT 00:47 2017 Monday ,27 February

17.4 million tourists visit UAE in 2016

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 06:27 2017 Wednesday ,01 March

GSMA: 5 billion mobile phone users in 2017

GMT 18:23 2017 Friday ,24 February

Fadi explains secrets of  Nancy Ajram's newlook
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday