Qantas announced its first full-year loss since its privatisation almost 20 years ago, and has cancelled a $8.5 billion (£5.35 billion) order for Boeing’s Dreamliner aircraft, with a focus to reduce its debt and strengthen its balance sheet against an uncertain outlook.
The Australian airline posted a net loss of $256 million (£161million) for the year ending June 30, 2012, as compared to the net profit of $263 million (£165 million) in the previous year. With the Boeing order scrapped, Qantas will receive $433 million (£272.5 million) in refunds and compensation from Boeing because of long delays to the Dreamliner programme.
The airline’s chief executive Alan Joyce said, “The B787 is an excellent aircraft and remains an important part of our future. However, circumstances have changed significantly since our order several years ago. It is vital that we allocate capital carefully across the group.”
Joyce also said that the results marked an “inflection point” for the airline that has been facing tough competition from Chinese and Middle-east airlines that have lower cost bases.
Alan Joyce and several other Australian bosses declined to take their bonuses for 2012 after it became amply clear that corporate performances did not reflected the country’s booming economy. Interestingly, Alan Joyce created a ruckus last year when he accepted a salary package including bonuses of $5.25 million (£3.30 million) despite a sharp fall in profits.
The company has already begun transformational measures to revive the unit, including cancelling services on loss-making routes and streamlining some of its maintenance operations. The restructuring plan is also expected to layoff 2,800 employees helping to reduce costs further.