Industrial action and the decision to ground its entire fleet in October has cost Qantas $194 million, the company confirmed this morning as it forecasts a slump in full-year profit.
In a statement to the Australian Securities Exchange, it said it expects to post a net profit in the range of $140-190 million in the six months to December 31, but that is down a massive 66% from the previous corresponding period.
The industrial unrest has taken a heavy toll on the company, chief executive Alan Joyce said in a statement.
The airline said the strike action before the full grounding cost $68 million, while lost bookings and the grounding itself cost $27 million and $70 million respectively.
The result comes as a new report in the Australian Financial Review claims Qantas has shelved plans for its new airline based in Asia.
The Australian sharemarket jumped 1.5% at the open, reacting to positive news from Europe.
The weekend saw reports that French and German leaders were working on a new “stability pack”, and the IMF was readying a €600 billion loan to Italy.
The morning’s rise takes the Australian market above the psychologically significant 4,000 point mark. The benchmark S&P/ASX200 was up 67 points or 1.7% to 4051.5 at 12.00 AEST, while the Australian dollar was also up to $US0.98c.
AMP shares were up 1.49% to $4.08, while Commonwealth Bank shares rose 3.06% to $46.78. Westpac shares rose 2.92% to $20.07 as NAB rose 3.39% to $22.50.
Newly appointed Italian Prime Minister Mario Monti has come under pressure to speed up anti-crisis measures as the IMF considers a €600 billion loan to Italy.
The money would give Monti up to 18 months to implement the tricky duo of budget cuts and growth-boosting reforms.
An Italian newspaper has reported the IMF would provide the loan at a 4-5% interest rate – well below Italy’s borrowing costs on commercial debt markets, where the yield on Italian two and five-year government bonds has risen above 7%.
Italy needs to refinance €400 billion in debt in the coming year.
Telstra has resubmitted its plan for the $11 billion deal with the National Broadband Network, according to a report in the Australian Financial Review.
The plan, delivered to the Australian Competition and Consumer Commission, spells out how the company plans to split its wholesale and retail networks.
The structural separation undertaking reportedly contained a number of issues in its previous filing, the report claims, and the ACCC wanted to see changes.
The report claims that if the ACCC is satisfied it will open up more talks within the industry about the report.
The Australian Securities and Investments Commission has confirmed it is investigating 35 alleged insider trading cases after receiving thousands of tips.
“At the next stage some of those might be headed to the Director of Public Prosecutions (DPP) to take criminal court action,” an ASIC spokesman told AAP on the weekend.
ASIC chairman Greg Medcraft also said the regulator had recorded several convictions since his job began in June.
“The message to anybody who’s thinking about insider trading [is] we’ve got the systems, we’ve got the people, we’ve got the powers, we most likely will find you,” he told Inside Business yesterday.
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