Qantas shares plunge after huge profit warning

Shares in Australian flag carrier Qantas Airways plunged to a record low today after the airline warned its full-year underlying pre-tax profit was likely to fall 91 percent from last year.

Qantas blamed steep losses in its international arm, which has been hit by the euro zone crisis, strong Australian dollar and soaring jet fuel prices, the company said in a statement to the Australian Stock Exchange.

According to The Australian, Qantas shares closed at a record low of $1.16 after falling 26.5 cents or nearly 19 percent, erasing $600 million from the value of the company.

''The deterioration in international and domestic has only started to come through in recent weeks,'' Qantas chief Alan Joyce was quoted by The Sydney Morning Herald as saying.

''We've had a significant change from mid-March.''

More from GlobalPost: Qantas expands Jetstar services into China with Eastern Airlines joint venture

Qantas said it expected underlying pre-tax profit for the year ending June 30 to be between $50 million and $100 million – 91 percent below the $552 million recorded last year, according to Agence France-Presse.

Its international division is expected to post a earnings before interest and tax loss of more than $450 million, more than double the loss of $216 million in the last financial year, Qantas said.

Last month Qantas announced plans to split its loss-making international flights operation from its profitable domestic arm as part of a wider restructure.
It also plans to cut 500 engineering jobs from its operations at Victoria's Tullarmarine and Avalon airports.

More from GlobalPost: Drunken Australian grandmother punches fellow passenger, turning Qantas flight around