Qantas confirms 5000 job cuts and huge loss; iSelect posts 18% revenue growth: Midday Roundup

Qantas has this morning confirmed it is axing 5000 jobs, as the company faces an uphill battle to return to profitability.

The airline posted a half-year statutory loss after tax of $235 million, a 315.6% decline on the previous corresponding period’s $109 million profit.

Qantas recorded an underlying loss before tax of $252 million.

The airline is waiting for news as to whether it will receive financial assistance from the federal government, which is considering altering the Qantas Sale Act to allow for greater foreign ownership of the airline.

Qantas chief executive Alan Joyce said in a statement to the ASX the results were unacceptable and action would be taken.

“We are facing some of the toughest conditions Qantas has ever seen,” he says.

“Australia has been hit by a giant wave of international airline capacity, with a 46% increase in competitor capacity since 2009 – more than double the global increase of 21% over the same period.”

Over the past four years, Qantas has cut comparable unit costs by 19%, but Joyce says this isn’t enough for the current circumstances.

iSelect posts 18% revenue growth

Newly listed iSelect has recorded an 18.3% increase in its revenue for the first-half to $55.8 million.

The comparison website’s net profit after tax rose a substantial 1,698% to $3.7 million, up from $205,000 in the previous corresponding period. 

iSelect earnings before interest, tax, depreciation or amortisation also increased 74% to $6.8 million, from $3.9 million in the previous corresponding period.

Shares down on open

Aussie shares have opened lower, despite a flat day of trading on Wall Street.

The S&P/ASX200 benchmark was down 24.7 points to 5412.3 at 12:20pm AEDT. Overnight the Dow Jones closed 18.75 points higher, up 0.12% to 16,198.41.