Natural disasters cost Qantas US$218 million

Qantas said “several significant weather events and natural disasters” had wiped AU$206 million from the bottom line for the 12 months to June 30, estimating underlying profit before tax of AU$500-550 million.

“This includes the estimate of US$21 million for the disruptions caused by ash from the Chilean volcano up to 20 June 2011,” the airline said in a statement to the Australian Stock Exchange.

“Given the disruptions are continuing this week, Qantas is not in a position to provide a more specific guidance range at this stage.”

Earthquakes in Japan and New Zealand — among Australia's major tourist markets — and local floods and cyclones had cost Qantas US$185 million, the airline said, a US$45 million increase on previous estimates.

“Significantly higher fuel prices” had hit second-half earnings, it added.

“While fuel hedging has provided some protection against these increases, prices remain at historically high levels,” the airline said.

Qantas chief Alan Joyce said its international operations were expected to record a loss of US$200 million before tax, with a “weaker result expected next year.”

“Qantas International is the group's weakest business — it had achieved required returns only three times in the past 15 years,” Joyce said.

“Clearly the situation is not sustainable. However, we are developing a long-term strategy aimed at restoring competitiveness and profitability.”

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