24 Aug 2012

Qantas cancels order after posting first annual loss

9:30 am on 24 August 2012

Qantas has been forced to cancel an order for new Boeing airliners after reporting its first annual loss since the company's privatisation in 1995.

Australia's national carrier posted a net loss of $A245 million for year to June, in a $A500 million turnaround on last year's profit.

The company blames higher fuel, restructuring and industrial action costs and its underperforming international division, the ABC reports.

A survey by financial news service Bloomberg shows analyst forecasts centred on a $A223.5 million net loss, so the result has disappointed already lowered expectations.

However, investors were pleased by the decision to cancel orders for 35 new Boeing 787s, which will save Qantas about $US8.5 billion ($A8.1 billion).

As a result of the loss, 35 Boeing 787 Dreamliners will not be delivered to Qantas, though budget offshoot Jetstar is still set to get 15 of them in the second half of this year.

The carrier is also separating its loss-making international business from its profitable domestic unit, eliminating loss-making routes, axing 2800 jobs and slashing capital spending.

The Transport Workers Union says bad management over the past two years is responsible for the loss.