No wonder Qantas Group CEO Alan Joyce wanted to break out and quarantine the results of Qantas International, which is now officially a basket case, forecasting a loss of A$450 million for 2011/12, more than double the A$216 million it lost the previous financial year.
Yet in the domestic market, both Qantas and Jetstar will deliver improved performance and deliver pre-tax earnings of more than A$600 million.
Mr Joyce said the overall underlying Qantas Group is expected to between $50-$100 million for the full year to 30 June, reflecting “the recent deterioration in global aviation operating conditions driven by the European economic crisis, the Group’s highest ever jet fuel bill, and substantial capacity increases in the domestic market that have reduced yields”.
He indicated Qantas International will continue losing money for at least the next 18 months and is aiming for a return to profit in 2014.
Qantas International, Qantas Domestic and Jetstar now report their results independently following a restructure a couple of weeks ago.