Qantas sees record profit on way
SYDNEY, Australia (CNN) -- One day after a profit downgrade from its smaller rival Virgin Blue, Australian airline Qantas says it expects its 2005 full year profit will top its record 2004 pre-tax result of Aust. $964.6 million ($733 million).
The airline, which is one of the most profitable carriers in the region, said Thursday it would release its interim result next month.
Its bullish outlook contrasts with low-cost carrier Virgin Blue, which said on Wednesday it was cutting its profit forecast for the year to March 2005 by 10 to 15 percent after poorer than expected passenger numbers.
The discount carrier said in a statement its "load factors have been disappointing" and the sluggish demand it reported in November and December was continuing.
The price war between Virgin Blue and new competitor Jetstar, a discount subsidiary started by Qantas in May 2004, has eaten into its sales and overall profit.
As well, Virgin Blue's purchase of new aircraft in order to compete with Jetstar has been criticized by some analysts, who say it has left the airline with too much capacity.
Rises in airport landing fees are also thought to have contributed to the profit downgrade.
Despite the anticipated record profit, Qantas CEO Geoff Dixon said this week that some of the airline's activities would have to be moved offshore to ensure further profitability.
Dixon said some jobs, products and services would be moved from Australia.
"We are ...operating in a global market and there is no room for complacency simply because we are currently profitable and successful," he said.
Dixon was in France earlier this week for the unveiling of the Airbus A380 double-decker jet, which Qantas will introduce on its trans-Pacific routes in 2006.
Qantas will release its half-year results on Thursday 17 February.
Qantas shares are up 0.85 percent to A$3.54 Thursday afternoon. Virgin Blue shares, which floated in December 2003 at A$2.25, hit a record low of A$1.60 on Wednesday and are trading at A$1.73 near the close.
