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Qantas profits, passengers down sharply

written by australianaviation.com.au | November 28, 2011

Qantas says the industrial dispute with its unions cost the airline $194m in the first half of the financial year.

High fuel prices and its running dispute with unions have cost Qantas more than $650 million, according to a profit update released today by the airline.

Qantas expects a first-half underlying profit of $140 to $190 million, a sharp decline from its $417 million profit in the first half of 2010/11.

The labour battle that led the airline to briefly ground its fleet at the end of October cost Qantas $194 million, including $70 million in lost sales, refunded tickets and hotel bills over the three-day grounding. The airline also estimated a $27 million loss in future bookings and $29 million in free flights and other perks handed out to passengers effected by the grounding, which stranded more than 60,000 travelers.

In a statement, Qantas CEO Alan Joyce defended the decision to ground the fleet, saying industrial action had cost the company $68 million prior to the decision and would have cost the company $85 million a month had it been allowed to continue.

Passenger numbers also tumbled in October, with Qantas Domestic down 11.3 per cent from a year earlier and Qantas International off 3.6 per cent. Those number reflected the effects of the grounding and labour dispute, and continued a downward trend for the flagship carrier, which saw a 3.5 per cent drop in domestic passengers last month.


Budget subsidiary Jetstar, which wasn’t impacted by the grounding, saw solid continued growth as domestic passengers were up 7.9 per cent, international up 11.1 per cent and Jetstar Asia up 7.1 per cent. Overall, the Qantas Group reported a 1.8 per cent drop.

Joyce said forward bookings on Qantas have returned to normal since labour umpire Fair Work Australia ordered an end to industrial action and the labour dispute moved to binding arbitration.

“After a very difficult period we are now back to normal operations thanks to the continued support and loyalty of our customers and employees,” he said.

Qantas said it couldn’t estimate profits for the second half of the year, citing volatile fuel prices and foreign exchange rates. The airline said it had a current cash balance of more than $3.3 billion.

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