Strikes, fuel prices sink Qantas profits
Nov. 28, 2011, Sydney, Aus. - Qantas Airways Ltd. said Monday its half-year profit is likely to slide as much as two-thirds due to strikes and high jet fuel prices.
November 28, 2011 By Carey Fredericks
The Australian flagship airline grounded its entire fleet in October after weeks of strikes by staff forced it to cancel and reschedule flights for 70,000 passengers. A court has since barred any further strikes for the sake of the national economy.
The airline forecast that its underlying net profit for the six months through December 2011 will be in a range of AU$140 million to AU$190 million. That would represent a decline of between 54 per cent and 66 per cent from the AU$417 million profit reported for the same six months a year earlier.
The airline blamed fuel costs and strikes for costing AU$650 million in the current half.
Qantas said its unable to offer earnings estimates for the second half of the fiscal year.
"The outlook for the second half … remains volatile and given the uncertainty in global economic condition, fuel prices and foreign exchange rates, it is not possible to provide further guidance at this time,'' the company said in a statement.
Qantas shares gained 4.1 per cent to AU$1.52 in early trading Monday.
Market analyst Peter Esho said the share gain should be kept in perspective as a year earlier the company's shares were trading at about AU$2.50.