Australian carrier Qantas has posted its first annual loss since privatisation in 1995 and cancelled orders for 35 Boeing jets as high fuel costs and industrial action hammered its bottom line.
The airline announced a net loss of $256m (244 million Australian dollar), a half-billion-dollar reverse from a net profit of AU$250m in the previous 12 months.
The carrier blamed the annual loss on an 18 per cent rise in its fuel bill, an industrial dispute that the airline said cost AU$194m, and its struggling international business, which lost AU$450m.
A soaring Australian dollar and a bitter battle with unions over wages and conditions - that led to Alan Joyce, the chief executive, grounding the entire fleet for 48 hours in October - also cost the airline dearly.
This week, Joyce announced he was giving up his bonus and pay rise, a sign of more cost-cutting to come.
"Over the course of the year we made significant progress in advancing the group's strategy - building on our strong domestic business and frequent flyer programme and growing Jetstar across Asia," he said.
"Qantas' international's turnaround plan is on track and set for improvement in 2012/13."
The airline did not offer any forward looking profit guidance but said the operating environment and economic outlook "remains challenging, volatile and dependent on a number of uncontrollable external factors". Joyce said.
"We will continue to invest capital efficiently as we target greater competitiveness and customer satisfaction to deliver a stronger Qantas group."
To cut costs, Qantas cancelled orders for 35 Boeing 787 aircraft, a decision that represents an $8.5bn reduction in capital expenditure at list prices.