Qantas slumps to loss as costs, competition bite

Qantas has slumped to a $245 million full-year loss, its first since Australia's largest airline was fully privatised 17 years ago, due to high fuel prices, intense competition and industral disputes.

The statutory loss for the year to June compares with a $250 million profit a year earlier.

The bottom-line loss is not a huge surprise to the market because the airline group, which includes Jetstar, had warned in June that it would slide into the red due to high fuel prices, big losses from its premium international business and a battle with Virgin Australia in the domestic market.

The market had expected Qantas to post a net loss of $224 million for the year.

Qantas shares have been battered over the past year, sinking to a record low of 96 cents in June. They closed yesterday at $1.17, still 20 per cent lower in 2012, compared with a 61 per cent rally for smaller rival Virgin Australia and the 7.8 per cent rise for the broader ASX200 share index.

Compared with international peers, Qantas has also been a laggard, trailing the 2.1 per cent loss for Hong Kong-based Cathay Pacific and a 6.9 per cent gain so far this year for Singapore Airlines.

More to come

The story Qantas slumps to loss as costs, competition bite first appeared on The Sydney Morning Herald.

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