Qantas reports record annual loss

Aug 28, 2014, 2:39 AM EDT
A Qantas aeroplane comes in to land at Melbourne Tullamarine Airport on February 25, 2014 in Melbourne, Australia.
AFP/Getty Images

Australia's national flag carrier Qantas has reported a net loss of 2.8bn Australian dollars ($2.6bn; £1.6bn) for the year to June - its biggest ever annual loss. The BBC reports:

Analysts were expecting a net loss of around A$750m. Qantas said weak domestic demand, poor consumer spending and rising fuel costs also contributed to the huge loss. It is the worst result in the company's history and compares with a revised after-tax profit of A$2m a year earlier.

One-off costs associated with redundancies contributed to the full-year loss, though, and the firm said its current underlying financial position was strong and improving. "There is no doubt today's numbers are confronting," said the carrier's chief executive officer, Alan Joyce, "but they represent the year that is past".

He added that the airline would return to underlying profit in 2015.

Mr Joyce also confirmed the carrier would not sell its popular frequent flyer programme. The chief executive's positive outlook for the firm's future saw the carrier's shares rise in Australia by as much as 8% in morning trade.

Despite the dire numbers, the airline is positioned for a "better future," according to Australia's Deputy Prime Minister Warren Truss. The Sydney Morning Herald writes:

"The fact they are projecting to move to a situation where they will be in profit in the first half of next year, that is very encouraging," Mr Truss told reporters in Canberra on Thursday.

"I think their determination to reduce costs and retire debt, and that they have the capacity to retire debt, will be encouraging to their investors."

He said the market had reacted favourably to the figures despite "some substantial shocks in what they are announcing".