Qantas has suffered a massive $2.8 billion loss in the wake of the airline’s profit-draining battle with rival Virgin and another poor performance from its international division.
The airline posted a net loss of $2.84 billion for the year to June 30, compared to a $1 million profit a year ago.
The result included a $2.6 billion writedown to the value of its ageing international fleet.
Excluding the writedown and other one-off costs, Qantas made an underlying pre-tax loss of $646 million, compared to a $186 million profit a year ago.
Chief executive Alan Joyce described the result as “confronting”, but said the massive loss represented the year that is past.
‘We have now come through the worst,’ he said in a statement on Thursday.
‘With our accelerated Qantas transformation program we are already emerging as a leaner, more focused and more sustainable Qantas group.’
Meanwhile, the airline has ruled out selling or floating its profitable frequent flyer business, Qantas Loyalty in order to fund its turnaround.
‘After careful consideration, our judgment was that Qantas Loyalty continued to offer major profitable growth opportunities, and there was insufficient justification for a partial sale,’ Mr Joyce said.
Qantas has also decided to separate its domestic and international arms, creating a new corporate entity for the Qantas International.
Mr Joyce said the Qantas Sale Act, recently passed by the federal parliament, had paved the way for the structural separation.
‘This will have no impact on the day-to-day operations, network or staffing at Qantas International,’ he said.
The carrier has also announced it will write down its entire fleet of Boeing 747s and A380s, at a value of $2.6 billion.