Qantas will cut more jobs following a 10 per cent profit fall due to high fuel costs.
The airline reported a $352.6 million half-year profit, down from $390.2 million in the same period last year.
Despite moves to improve the efficiency of its business, the "extraordinary" high cost of jet fuel was having a substantial ongoing impact, the airline said in a statement.
"While further reforms in the business are under way, and coupled with the high fuel price, we do not expect to achieve the same levels of profitability in the current financial year." the statement said.
Qantas chief executive Geoff Dixon said any job losses or job moves overseas would depend on upcoming policy decisions from the federal government.
The government is currently undergoing a review to decide on whether it would allow Singapore Airlines to compete against Qantas on the lucrative trans-Pacific route between Australia and the US.
The final decision by the government has been delayed on a number of occasions but it is believed to be due in the near future.
Mr Dixon today asked the government for a decision as soon as possible.
"This is a very important decision," Mr Dixon said. "It is important for how we will run the company in the future.
"Every decision we make must be impacted by the regulatory position we find ourselves in.
"The policy settings that are made by the Australian government - we will take in all those considerations when we are making other decisions on where we can best make our investments, where we can best achieve our bottom line."
The airline's December-half profit, which equated to a 9.6 per cent decline on the same period last year, included the impact of a one-off restructuring cost of $69.9 million.
"The result was achieved in very difficult trading conditions, with fuel prices increasing costs by $689.8 million before hedging benefits of $214.7 million, and aggressive competitor capacity increases in the international market," Qantas said.
Qantas' performance, like other airlines, was increasingly influenced by fuel costs, Mr Dixon said.
"Fuel costs climbed by 58 per cent in the half year and represented 28 per cent of our net expenditure," he said.
"All our business transformation initiatives are now focused on enabling Qantas to meet its future expenditure commitments and profit projections with a fuel cost above $US60 a barrel," he said.
Mr Dixon warned that Qantas would continue to cut jobs as it made further efforts to protect profits.
Continue Reading this Story at Sydney Morning Herald
Comment Preview