Qantas Airways Ltd said sales on some routes dropped two-thirds as a deadly virus sapped travel demand, making the airline miss its own profit target and delay the delivery of planes. Its shares dropped as much as 5.6 percent.
Bookings on Australia's biggest airline to Hong Kong, where severe acute respiratory syndrome (SARS) has killed 193 people, are down 64 percent. Demand on flights to Australia from Europe, which stop in Hong Kong and Singapore, has slumped, denting sales at home because international visitors account for 15 percent of domestic sales. The airline also said it will cut more staff.
Qantas joins Cathay Pacific Airways Ltd and other airlines in delaying aircraft orders, making it harder for Boeing Co and Airbus SAS to meet delivery forecasts. The airline, which in March said full-year profit will miss analysts' estimates, didn't give details on orders for planes or its own profit forecast.
"It just highlights how tough the global airline industry is," said Dennis Tighe, who helps manage the equivalent of US$100 million at Allianz Dresdner Asset Management Australia Ltd, including Qantas shares. "The company has responded pretty much in the ways you'd expect them to, but these factors are outside their control."
Shares of Qantas were down A$0.13, or 4.3 percent, at A$3.06 at 1:32pm in Sydney. The stock has shed one-fifth of its value this year. Shares of Cathay, Hong Kong's only long distance carrier fell as much as 6 percent.
"The aviation industry is going through the most difficult period in its history," chief executive Geoff Dixon said in a statement to the Australian Stock Exchange.
Before the SARS outbreak, the airline was on track for a record A$594 million (US$381 million) profit, according to the average forecast of 14 analysts surveyed by Thomson Financial.
Qantas hasn't provided earnings forecasts for this financial year.
The airline also didn't say how many more jobs it may cut.
Qantas will cut more staff after it said in April it would eliminate 1,400 jobs, or 4 percent of its workers, and another 300 full-time employees would be moved to part-time jobs. It also said more people will be forced to take leave without pay.
Some aircraft will be retired and new plane deliveries will be deferred, Qantas said.
Airbus, the world's second-largest maker of aircraft, last month said it may not meet its goal of delivering 300 planes this year because the onset of SARS is causing Asian carriers to push back orders.
Qantas said ticket sales on Japan services fell by 30 percent while bookings from France, Italy and the UK had fallen 45 percent, 33 percent and 14 percent respectively. Declining demand for international travel to Australia has hurt domestic ticket sales.
NO HUMAN ERROR: After the incident, the Coast Guard Administration said it would obtain uncrewed aerial vehicles and vessels to boost its detection capacity Authorities would improve border control to prevent unlawful entry into Taiwan’s waters and safeguard national security, the Mainland Affairs Council (MAC) said yesterday after a Chinese man reached the nation’s coast on an inflatable boat, saying he “defected to freedom.” The man was found on a rubber boat when he was about to set foot on Taiwan at the estuary of Houkeng River (後坑溪) near Taiping Borough (太平) in New Taipei City’s Linkou District (林口), authorities said. The Coast Guard Administration’s (CGA) northern branch said it received a report at 6:30am yesterday morning from the New Taipei City Fire Department about a
IN BEIJING’S FAVOR: A China Coast Guard spokesperson said that the Chinese maritime police would continue to carry out law enforcement activities in waters it claims The Philippines withdrew its coast guard vessel from a South China Sea shoal that has recently been at the center of tensions with Beijing. BRP Teresa Magbanua “was compelled to return to port” from Sabina Shoal (Xianbin Shoal, 仙濱暗沙) due to bad weather, depleted supplies and the need to evacuate personnel requiring medical care, the Philippine Coast Guard (PCG) spokesman Jay Tarriela said yesterday in a post on X. The Philippine vessel “will be in tiptop shape to resume her mission” after it has been resupplied and repaired, Philippine Executive Secretary Lucas Bersamin, who heads the nation’s maritime council, said
REGIONAL STABILITY: Taipei thanked the Biden administration for authorizing its 16th sale of military goods and services to uphold Taiwan’s defense and safety The US Department of State has approved the sale of US$228 million of military goods and services to Taiwan, the US Department of Defense said on Monday. The state department “made a determination approving a possible Foreign Military Sale” to the Taipei Economic and Cultural Representative Office in the US for “return, repair and reshipment of spare parts and related equipment,” the defense department’s Defense Security Cooperation Agency said in a news release. Taiwan had requested the purchase of items and services which include the “return, repair and reshipment of classified and unclassified spare parts for aircraft and related equipment; US Government
More than 500 people on Saturday marched in New York in support of Taiwan’s entry to the UN, significantly more people than previous years. The march, coinciding with the ongoing 79th session of the UN General Assembly, comes close on the heels of growing international discourse regarding the meaning of UN Resolution 2758. Resolution 2758, adopted by the UN General Assembly in 1971, recognizes the People’s Republic of China (PRC) as the “only lawful representative of China.” It resulted in the Republic of China (ROC) losing its seat at the UN to the PRC. Taiwan has since been excluded from