Qantas forecasts up to 90% fall in full-year profit, stocks plunge
By Martin Parry, AFP
June 6, 2012, 11:33 am TWN
Former Qantas chief economist Tony Webber told ABC radio it was the worst result he could remember for the airline.
"I've never seen a deterioration in Qantas international profitability that big as far as I'm aware," said Webber, now an associate professor at the University of Sydney. "That's quite an astonishing loss."
In a bid to halt the dramatic earnings slide, Joyce last month announced Qantas would split its international arm from its domestic operations.
Each of the two entities, currently combined as Qantas Airways, will run as separate businesses from July with their own chief executives and reporting of financial results.
The move came days after Joyce said 500 jobs would be axed in Qantas' heavy-maintenance and engineering operations.
"We have taken decisive action to mitigate losses in Qantas international by withdrawing from loss-making routes, reducing capital investment, and transforming Qantas engineering," Joyce said Tuesday.
"The introduction of a new Qantas Group structure with dedicated CEOs for Qantas international and Qantas domestic will bring further rigor to our business."
Joyce said the restructuring program is expected to incur costs of up to AU$380 million in the 2011-12 financial year but would result in more than U$300 million in annual benefits once in place.