With its reputation in the toilet, Qantas is wise to absorb the increase in jet fuel costs. But the hits to its profitability just keep coming.
Forget the overdue customer apologies, the carefully managed corporate videos and the threats to claw back bonuses.
Indeed, this was a central theme of the June quarter reporting season in the US, where earnings forecasts for the likes of American Airlines, United and Delta were downgraded due to concerns about fuel prices and the potential flow-on effect to demand. American Airlines shares are down 30 per cent since their peak in July.
Indeed, you might argue that Qantas has suffered a triple fuel hit – higher oil prices, a weaker Australian dollar and reputational damage that makes it harder for it to lift fares to protect profits.
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