Australia's dominant airline Qantas has seen its after-tax profit for the past financial year drop 30.4 per cent to A$480 million.
The previous year's result was an A$689 million profit.
Chief executive Geoff Dixon says higher jet fuel prices have increased costs by almost A$1.1 billion.
"In February this year,
I said our business transformation would need to be predicated on a fuel cost of above USA$60 a barrel for crude oil," he said.
"That figure is now more than USA$ 70 a barrel."
He says international passengers will be hit with another increase in the fuel surcharge, but will not specify by how much.
"We'll announce that probably tomorrow or Saturday, but more likely tomorrow," he said.
"I don't believe it will be significant.
"But certainly the way things are now we believe with competitive pressures we're under that it does require adjustments."
Mr Dixon says revenues, which totalled A$13.6 billion, and passenger numbers are at record levels.
He says the main contributors to the result are improved yields per seat, greater capacity on subsidiary Jetstar and cost savings from its restructuring program.
"The stark reality is that without the cost savings we have achieved through our Sustainable Future Program, we would not be in the profitable position we are today," he said.
Mr Dixon also says Qantas has spent A$1 billion in the past five years on security costs and insurance and that will continue to rise.
"The next year will be tough," he said.
"However, it is imperative that the Qantas Group continues to grow to maintain a competitive network proposition, and that growth must be profitable."
Qantas shareholders will receive a final dividend of 11 cents a share.
- RADIO AUSTRALIA
