Qantas First-Half Profit Halves; Flags Job Cuts

Getty Images

Australia's top airline Qantas Airways posted a 51.5 percent fall in first-half underlying profit after a bitter industrial dispute and high fuel bills took their toll and said it planned job cuts to offset challenging conditions.

Qantas, which suspended all flights for two days last year to bring a battle with unions to a head, said underlying profit before tax fell to A$202 million ($216.5 million) compared with A$417 million a year ago. Analysts, on average, had expected earnings of around A$176 million.

The global airline industry has been struggling to pass on higher fuel costs to customers as demand for business and leisure travel dwindles due to the global economic slowdown.

Qantas said it would withdraw some international services, retire early some aircraft, undertake to build a more competitive engineering operation and make changes to its catering business.

It added these changes would result in job losses. It did not specify the scale of job losses.

In November, Qantas said it expected an underlying profit before tax of between A$140 million and A$190 million in the six months to December, forcing analysts to slash forecasts.

Qantas has said strikes, the grounding of its fleet and high fuel bills have cost it more than A$650 million.