Qantas has filed a $AUS2.8 billion loss for the 12 months to June 30th, the biggest ever annual deficit at the carrier.
The Australian flag-carrier said the majority of the losses were down to an AUS$2.6 billion write-down on the value of its international fleet.
Qantas said weak domestic demand in Australia, poor consumer spending and rising fuel costs also contributed to the huge loss.
Last year the airline reported a modest profit of AUS$2 million.
Despite the headline figure, Qantas chief executive Alan Joyce sounded an upbeat note.
The figures “represent the year that is past”, Joyce said, adding that he expected to return Qantas to underlying profit in 2015.
Joyce also confirmed the carrier would not sell its popular frequent flyer programme.
“Our cash balance and liquidity position is strong,” he said, “and the group’s overall financial performance is rapidly improving”.
The national flag carrier has said for many months that it has been facing tough competition in both international and domestic markets.
The carrier had also argued the Australian government’s laws that restricted it from accessing foreign funding had hampered its ability to compete with other airlines.
Lawmakers in Australia recently agreed to relax those laws, which prevented a foreign investor from owning more than 25 per cent of the carrier.