6 Jun 2012

Qantas plan to get out of red by 2014 'optimistic'

9:15 am on 6 June 2012

An analyst says there are doubts that Qantas will meet a deadline to lower costs in its international business and return it to profitability by 2014.

Qantas shares dived to an all-time low on Tuesday after the airline announced it expected full-year profit before tax to fall as much as 90% due to losses in its international business of up to $A450 million.

The group says it expects to post underlying profit before tax of between $A50 - $A100 million for the 2011-12 financial year.

Last financial year the airline posted a profit of $A552 million.

The airline blames worsening international aviation conditions due to the eurozone's debt problems, and says it is facing its highest bill for jet fuel.

Fat Prophets analyst Greg Fraser says the company's fuel bill has risen by 21% to nearly $A4.4 billion but it is trying to sort out its problems.

It hoped to relocate some staff and reduce costs, but Mr Fraser suggested it was taking an optimistic view to expect a return to profit by the 2013 financial year.

Centre for Asia Pacific Aviation Studies aviation analyst Peter Harbison says most of the slump came from Qantas' international services, which were hit hard by the grounding of the entire Qantas fleet in October last year.