Fuel 'volatile, trending up', downgraded Qantas says

Qantas tightens policy on "volatile and trending upwards" fuel costs after freight earnings drop

Qantas will look to tighten its policy on fuel conservation after the airline’s Freight Enterprises division reported a big drop in earnings.

The airline announced an underlying earnings before interest and taxes (EBIT) figure of $7 million for the 2008-09 financial year, a decrease of $72 million on the previous year.

In total the company posted its first loss in six years when it announced net profits of $117 million, an 88 percent decrease from the $969 million profit it raked in last year.

Qantas CEO Alan Joyce says the massive losses in the national carriers freight division comes down to strong competition from Asia as well as capacity cuts.

He also believes while oil prices have not been as high throughout 2009, Qantas will act conservatively to ensure a possible increase does not affect his company negatively.

"We are also keeping a close watch on oil and fuel prices. While well below the record levels seen in 2008, they remain volatile and are trending upwards," Joyce says.

"For 2010 the Qantas group has hedged 80 percent of fuel costs at a worst case price of US$89 per barrel."

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