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Qantas forecasts drop in profits

Sydney - Embattled Australian flag carrier Qantas on Tuesday warned its full year profit could plunge by up to 90 percent, with its international arm posting steep losses.

The airline said it expects underlying profit before tax - its preferred measure of financial performance - in the year to June 30 to be between A$50-million and A$100-million, compared with A$552-million in the previous year.

In a statement to the stock market, the carrier blamed the troubled European economy and its highest ever jet fuel bill.

Qantas International is expected to post a loss of more than A$450-million, more than double the loss of A$216-million in the previous financial year.

In contrast, its far healthier domestic unit and low-cost offshoot Jetstar are expected to book a combined profit exceeding A$600-million.

“We remain focused on returning Qantas International to profitability in 2014 and for Qantas International and domestic combined to exceed their cost of capital on a sustainable basis within five years of August 2011,” said chief executive Alan Joyce. - Sapa-AFP

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