Qantas interim profit jumps 28%
SYDNEY, Australia (CNN) -- Australian airline Qantas has lifted first-half net profit 28 percent to A$458.4 million ($357 million), putting it on track for a record full year.
Qantas CEO Geoff Dixon said on Thursday that lower fuel costs, favorable exchange rates, better yields on its international flights and a strong domestic performance all contributed to the result.
Dixon repeated the prediction the airline made last month that its full year profit to June 2005 will top its record 2004 result.
The airline is one of the most profitable carriers in the region.
But Dixon said "standing still" was not an option in the aviation business.
"Our competitors are further reducing their costs by a variety of means, including bankruptcy protection in the United States, government-mandated industrial reform in Asia and consolidation in Europe," he said.
Dixon again urged that rival Singapore Airlines not be granted access to the lucrative trans-Pacific routes "at this time".
Qantas has lobbied strongly in recent months against Singapore Airlines being allowed to fly from Australian destinations across the Pacific to North America.
Dixon said Qantas supported aviation market liberalization where it resulted in "balanced outcomes and genuine opportunities to compete".
Dixon also warned of some negative issues in the second half of the year, including an expected A$30 million reduction in revenue as a result of the December 26 tsunamis.
He said the Qantas leisure carrier Australian Airlines was experiencing difficulties in Southeast Asian markets and would halt its twice-weekly service to Sabah, Malaysia, on April 29.
As well, Jetstar Asia, the low-cost Singapore-based carrier in which Qantas has a 49.9 percent stake, had been affected by an inability to obtain flying permits in some countries.
Qantas has about 66 percent of the Australian domestic market. Its rival, Virgin Blue, has been hard-hit by the arrival of Jetstar, launched by Qantas as a discount carrier in May last year.
Last month, Virgin Blue said it was cutting its profit forecast for the year to March 2005 by 10 to 15 percent after poorer than expected passenger numbers.
The low-cost carrier said its load factors had been disappointing and the sluggish demand it reported in November and December was continuing.
Australian transport group Patrick Corp announced a A$1.1 billion buyout bid on January 28 for Virgin Blue.
It said it was offering A$1.90 a share in cash for the 54.6 percent of the airline that it did not already own.
Virgin Blue's other major shareholder is Richard Branson's Virgin Group with about 25 percent. Branson started the discount carrier in September 2000.
Qantas shares are down 1.65 percent to A$3.58. Virgin Blue is down 0.5 percent to A$2.03.
