Business

Qantas says profit hit by strikes and high fuel costs

Passengers at Qantas check-in counters
Image caption Qantas has had to compensate passengers affected by its decision to ground its entire fleet

Qantas has said the industrial dispute with union members and rising fuel costs will dent its earnings for first half of the current financial year.

The carrier said it expects a profit of between 140m Australian dollars ($137m; £89m) to A$190m during the period, down from A$417m last year.

The dispute led the grounding of the entire fleet of Qantas last month, affecting 70,000 passengers worldwide.

The airline said that the dispute will cost it A$194m in the first half.

However, the company said that numbers were likely to pick up during the second half of the year.

"Since the termination of industrial action by Fair Work Australia we have seen customers return to Qantas," said Alan Joyce, chief executive of Qantas.

Growing troubles

The industrial dispute is the latest in the list of growing troubles for Australia's national carrier.

Earlier this year, earthquakes in New Zealand and Japan saw its operations to those two destinations being affected. On the domestic front, floods and cyclones in Australia also hampered its operations.

At the same time, its international operations have been losing almost A$200m per year due to rising fuel prices and increased competition.

The airline said, fuel costs had risen by as much as A$450m during the first half of the year.

Analysts said given all the troubles it has had in recent times, they remain cautious about its future.

"For us investors, this year expectations are low," said David Liu of ATI Asset Management, which owns Qantas shares.

"Our focus is entirely on how the recovery is shaping up [and] plans for the Asian hub. So far that looks positive," he added.

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