Qantas reports $256m loss and cancels plane orders

Australian airline Qantas has reported its first annual loss since it was privatised in 1995, amid high fuel costs and growing losses at its international operations.

The firm made a net loss of 244m Australian dollars ($256m; £161m) for the year to 30 June.

This compares with a net profit of A$250m in the previous year.

Qantas also cancelled orders for 35 Boeing Dreamliner jets worth $8.5bn due to "lower growth requirements".

Alan Joyce, chief executive of Qantas, said growth was expected to be slow due to the uncertain global economic environment especially in Britain, Europe and the United States.

The biggest impact on Qantas' earnings came from the growing losses at its international operations, which reported a net loss of A$450m.


Qantas has also lost passengers to rival carriers, reducing its share of the international market.

"Our biggest challenge is Qantas International," Mr Joyce said.

The firm has already taken measures to try to turn around the fortunes of the unit, including cancelling services on loss-making routes and streamlining some of its maintenance operations.

The restructuring plan is also expected to result in 2,800 job cuts.

Rising fuel costs also made a big dent in its balance sheet. The firm said its fuel costs had soared to a record A$4.3bn during the period, an increase of A$645m from a year earlier.