Qantas has reported record losses of AU$646 million for the year to the end of June 2014.
CEO Alan Joyce blamed the losses on two years of market capacity growth outstripping demand, record high fuel costs, and weaker demand due to lower consumer confidence.
He blamed a statutory loss after tax of AU$2.8 billion on costs associated with the airline’s AU$2 billion transformation programme, including redundancies and early aircraft retirement, and a non-cash write-down of $2.6 billion to the value of the Qantas International fleet following a structural review.
"There’s no doubt that today’s numbers are confronting," he told investors.
"But they represent the year that is past, and we have now come through the worst."
He said the transformation was on track and would see ‘accelerating benefits’ in the coming year.
By the end of full year 2015, 4000 of the total 5000 redundancies will have taken place and would conclude the period of major job reductions, he added.
"Over the coming year we anticipate continuing high competitive intensity, but capacity growth is clearly and significantly easing in both the domestic and international markets," said Joyce.
"International competitor capacity growth in Australia is expected to be below three per cent for the first half of 2015, compared to average growth of eight per cent over the past four years.
"Overall domestic capacity growth in the first half of 2015 is likely to be around one per cent."
He said Qantas Group domestic capacity growth would continue to be frozen for the first half of 2015.
