Qantas Airways, Australia's biggest airline, is cutting orders for 35 Boeing 787-9 aircraft for a saving of US$8.5 billion as it announces its first trading loss since being privatised in 1995.
The airline reported a statutory loss of A$244 million ($NZ315m) for the year ended June 30, a half billion dollar turnaround on the profit of A$249 million a year earlier, Qantas said in a statement to the ASX.
The loss came despite a 5.6 per cent lift in total group revenues to A$15.72 billion and reflects what the company described as "a difficult year of major transformational change" and a record result on an underlying operating earnings basis for its budget carrier, Jetstar.
That's despite a report earlier this week by Fairfax Media that Qantas subsidiary JetConnect is losing money in the heavily contested trans-Tasman trade. Today's group result makes no specific mention of New Zealand operations.
However, in an accompanying announcement, Qantas says it is restructuring its plans for fleet upgrades with Boeing 787-9's, cancelling orders for 35, taking delivery of the first of those remaining on order two years later than planned.
Deliveries of 15 B787-8 series aircraft will continue as planned, with the first arriving in the latter half of 2013, said chief executive Alan Joyce.
Orders for a further 50 787's will be retained, with the first of these to be available for delivery from 2016, in line with the announced turnaround plan for Qantas's troubled international business.
"In the context of returning Qantas International to profit, this is a prudent decision," Joyce said. While the B787 remained an important part of the airline's future, "circumstances have changed significantly since our order several years ago. It is vital that we allocate capital carefully across all parts of the group."
The decision will result in a net US$140 million impact on underlying profit before tax, which will be booked in the first half of the current financial year.