Ash, disasters cost Qantas $218 million

SYDNEY: Australian carrier Qantas on Wednesday said it had taken a Aus$206 (US$218) million hit from a string of natural disasters this year and warned of bleak conditions for its international arm.

Qantas said "several significant weather events and natural disasters" had wiped Aus$206 million from the bottom line for the 12 months to June 30, estimating underlying profit before tax of Aus$500-550 million.

"This includes the estimate of $21 million for the disruptions caused by ash from the Chilean volcano up to 20 June 2011," the airline said in a statement to the Australian Stock Exchange.

"Given the disruptions are continuing this week, Qantas is not in a position to provide a more specific guidance range at this stage."

Earthquakes in Japan and New Zealand -- among Australia's major tourist markets -- and local floods and cyclones had cost Qantas $185 million, the airline said, a $45 million increase on previous estimates.

"Significantly higher fuel prices" had hit second-half earnings, it added.

"While fuel hedging has provided some protection against these increases, prices remain at historically high levels," the airline said.

Qantas chief Alan Joyce said its international operations were expected to record a loss of $200 million before tax, with a "weaker result expected next year".

"Qantas International is the group's weakest business -- it had achieved required returns only three times in the past 15 years," Joyce said.

"Clearly the situation is not sustainable. However, we are developing a long-term strategy aimed at restoring competitiveness and profitability."

Joyce promised to take the "hard steps necessary to turn this airline around" and said strategic renewal plans would be unveiled later this year.

"Considering the challenges facing the aviation industry this is a very good result -- the Qantas Group's best since the global financial crisis," he said. (AFP)