Australia's Qantas Airways has cut its profit forecast for the financial year and is further reducing capacity as market conditions continue to deteriorate.
The Oneworld alliance carrier says in a statement that it now expects a pre-tax profit for the financial year ending 30 June of around A$500 million ($326 million). In August it said it expected a pre-tax profit for the year of around A$750 million, based on an average of analysts' forecasts at the time.
Qantas says it is also further cutting capacity as "the current economic downturn had principally affected Qantas' mainline international operations".
It says mainline domestic operations as well as the operations of low-cost subsidiary Jetstar, its frequent flyer programme and its freight division "all continue to perform well".
CEO Geoff Dixon, who is due to retire at the end of this week, says Qantas will "reduce capacity equivalent to grounding 10 aircraft", adding that the cuts will be in addition to others announced earlier.
"By taking this action now we will have the flexibility to switch growth back on as soon as market conditions improve," he says.
"We are in unpredictable times and the international business market, in particular, has slowed."
Dixon says Qantas will not be taking two leased Airbus A330-200s as previously planned and will change the flying patterns of existing aircraft "to free up the equivalent of six [Boeing] 747-400s, three [Boeing] 767-300s and one [Airbus] A320-200 aircraft between now and mid-2010".
He also says the carrier will "halt all planned domestic market growth for Qantas and Jetstar".
"Our actual flying in the next six months will be 4% below the equivalent period in 2008," adds Dixon.
Source: Air Transport Intelligence news
