Australia’s largest carrier, Qantas Airways Ltd, has revealed an 87% drop in its annual profits on the heels of the recession and declining demand for air travel. The group however did point to early indicators of an improvement in passenger traffic, although it was reluctant to issue a profit outlook in uncertain business conditions.

Qantas announced that its pre-tax profit to June 30 this year had fallen to $181 AUD, in line with its own forecasting made earlier this year during cuts in jobs and capacity. CEO Alan Joyce stated that; “During the second half, the environment deteriorated, with domestic and international competitor capacity continuing to grow and demand in key markets softening quickly as the global slowdown hit”.

Net profit for the group was down by almost 88% to $117 AUD. Mr Joyce attributed the cost of the H1N1 Swine Flu outbreak at around $45 AUD.

On a positive note, Joyce advised that the groups frequent flyer program continued to show excellent results, and its budget carrier Jetstar is scheduled to receive four new long haul aircraft, whilst reiterating that Qantas would, for the ‘foreseeable future’, retain full ownership.

The announcement comes at a time when global airlines have unanimously made cut backs on staff and capacity as travel experiences its worst recession in years.

In June, the International Air Transport Association predicted that airlines could lose close to $9 billion this year.

With thanks to www.reuters.com for the above information. For more details please refer to their website.