Qantas has predicted that its profits are expected to drop by as much as 90% amidst growing losses at its international operations and its “highest ever fuel bill.”
The airliner company has forecast profit before tax of between A$50 million (£31.6 million) and A$100 million (£63 million) for the year ending June 30, which is down from a profit before tax of A$552 million (£350 million) during the same period a year earlier. The airliner said that fuel costs for the period are expected to rise to A$4.4 billion (£2.78 billion), an increase of approximately A$700 million (£444 million) from the same period a year earlier.
Over the past few years, Qantas’ international operations has been an area of major concern. The division has been affected by slowing demand in its key markets as well as higher costs of operation. The firm said that losses at the division are expected to more than double to A$450 million (£285 million) in the financial year ending June 30.
Moreover, the enterprise was also affected by strikes last year, which resulted in Qantas grounding its entire fleet in an unprecedented move and resulted in millions of dollars in losses. In an effort to streamline its operations, Qantas has already announced plans to split its international and domestic operations into separate entities.
The company has withdrawn its services from loss-making international routes, while increasing its capacity on the profitable ones. It has also announced plans to cut jobs as part of the restructuring exercise.