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Qantas annual profit drops 88%

19 August 09 05:55 GMT

Qantas Airways has posted a large drop in its annual profits, as it continues to struggle with the economic downturn.

The Australian airline said net income for year to 30 June fell 88% to 117m Australian dollars ($96.5m; £58.5m).

Qantas also announced A$1.5bn of further cost-cutting measures, helping send the company's shares up by 5%.

"There has never been a more volatile and challenging time for the world's aviation industry," Qantas chief executive Alan Joyce said.

'Work to do'

The airline, like most others across the world, has been struggling with falling demand during the downturn, as well as the impact of the swine flu virus on international travel.

"When most airlines are reporting losses, the Qantas group is reporting a profit for the full year," Mr Joyce said.

Qantas said it would not pay out a dividend, and also said it could not offer any guidance on its profit for the next financial year "given the high level of uncertainty".

Airline analyst Saj Ahmad of Gerson Lehrman said the airline "still has lots of work to do" to turn around its fortunes.

"As with other airlines in the region, Qantas has been hit with a big decline in premium customers and this means that it too will have little choice but to re-evaluate its business model if it aims to stay competitive and profitable," he added.

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