- Qantas reports record $2.83 billion loss
- Jetstar posts first loss, $116 million
- Qantas domestic, international arms to split
Qantas has revealed a loss of $2.83 billion over the 2013-2014 financial year, although the figure is blown out by a $2.6 billion write-down for the airline's international fleet plus other one-off costs associated with redundancies.
Once those numbers are taken into account, Qantas' underlying loss is clawed back to a far less frightening – and certainly more manageable – $646 million.
Qantas' low-cost sibling Jetstar has not escaped its share of the pain, with the Jetstar Group losing $116 million before tax this year.
It's a shift in fortunes for the low-cost carrier, with profits down over a quarter of a billion dollars following last year’s earnings before tax profit of $138 million.
"There’s no doubt that today’s numbers are confronting. But they represent the year that is past, and we have now come through the worst," said Qantas Group CEO Alan Joyce.
"We therefore anticipate a rapid improvement in the Group’s financial performance in financial year 2015."
Despite the flowing red ink, Qantas Loyalty – the jewel in the Qantas Group's crown that includes Qantas Frequent Flyer – is not for sale.
"After careful consideration our judgement was that Qantas Loyalty continued to offer major profitable growth opportunities, and there was insufficient justification for a partial sale," Joyce said.
The first five aircraft of Qantas 50-strong Boeing 787-9 Dreamliner order will also be deferred from 2016 to 2017.
Qantas is also set to split its domestic and international arms to enable what CEO Alan Joyce calls "future investment around the international business".
The Red Roo is now entering the second year of an ambitious three-year ‘transformation program’ intended to carve out $2 billion dollars in costs by mid-2017 – a program which Qantas has said will come with its own $500 million bill.
This will include around 2,800 redundancies on top of the 2,200 jobs lost in the previous year.
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