Qantas has suffered an annual financial loss of AUD$2.8 billion, it was announced on Thursday.
The Australian airline has struggled to keep up with growing competition from budget airlines, particularly domestic market competitor Virgin Australia who announced their own AUD$350 million loss on Friday. Fuel costs have also been cited by the airline for its nightmarish financial situation which has already led to job losses.
While the AUD$2.8 billion loss was much higher than market expectations, embattled Qantas boss Alan Joyce was keen to point out that postponed right-downs were another reason for the huge figure.
In a bid to secure its future, Qantas has been looking further afield for a lifebuoy and have entered in to a share deal with China Southern Airlines which will allow the two airlines to share passengers on both domestic and international routes.
The troubled airline has recently forged similar ties with Dubai’s Emirates airline, which had until then been one of Qantas’s major international competitors on routes into and out of Australia.
Qantas have also been lobbying politicians in Canberra to ease regulations that limit its foreign ownership to 49%.
“If you look at the number of passenger airline miles that Qantas is flying, they are diminishing, and diminishing, and diminishing,” John Roberts, a marketing professor from the University of New South Wales told the BBC.
“There comes a point where you can’t shrink any further, and so where does this shrinking stop? I think it probably stops with Qantas being taken over, or by foreign capital coming in.”
While it would be in Qantas’s best interest to set themselves apart from budget airlines, their announcement this week that economy class passengers will receive their meals in small boxes instead of trays has sparked yet more negativity.
“Looks a little cheap” said Roberts.
“People still love Qantas but they are disappointed with its current performance.”
To add to the airline’s woes trade unions, threatening to strike action over job cuts, have blamed the carrier’s management for the company’s financial failure.
“No-one likes to see any redundancies but in many respects Qantas needs to change. It needs to transform, it needs to be competitive,” said Nathan Safe, president of the Australian and International Pilots Association.
“It needs to go through a little bit of pain initially like we are going through now with the redundancies, with the losses.”
“It needs to build a base from which it can grow into the future and it needs to be able to justify to the banks and to the shareholders injections of capital so it can re-equip the fleet,” he said.