Qantas on Wednesday said the downturn in international travel, and volatile currency and oil prices, had sent its profits down 68 per cent in the first half.
However, the Australian carrier sought to stress its relative strength during a period when many international airlines had failed or were fighting to survive the sharp drop in global passengers numbers.
Alan Joyce, chief executive, added that the bulk of airlines around the world were loss-making and noted that British Airways, which took part in unsuccessful merger talks with Qantas last year, had recently warned it would fall into a loss.
Qantas, which issued its own profits warning in November, said forward bookings in first and business class at its premium Qantas brand had not deteriorated since late last year, while premium economy and economy had strengthened.
Mr Joyce said forward bookings for Jetstar, the airline’s low-cost brand, had strengthened and the two-brand strategy was helping the group perform during the downturn.
Qantas controls close to two-thirds of Australia’s domestic aviation market.
The carrier also confirmed its plans to raise A$500m (US$324) through an underwritten share placement to institutional shareholders plus a further non-underwritten offer to raise an unspecified amount.
The Australian airline said that proceeds from the share placement would add to the group’s cash balances from A$2.8bn at the end of December to more than A$3bn.
“This is a prudent capital management initiative,” Mr Joyce said.
He also said it would provide extra liquidity and help preserve the group’s credit rating, which was particularly important to help Qantas fund its aircraft purchases competitively.
He said Qantas was not looking to build up reserves ahead of an acquisition.
Leigh Clifford, Qantas chairman, said the airline’s revenues had come under pressure but the carrier had managed to produce a good result in challenging times by “calibrating our network, stimulating demand through attractive pricing, maximising the performance of our diversified businesses, and restraining costs”.
Qantas last year announced 1,000 lay-offs and said on Wednesday, it was presently “holding off” on further cuts but they remained possible.
The carrier reaffirmed its forecast for full-year profits of A$500m. That figure is down by nearly two-thirds on the previous year.
First-half pre-tax profits fell 68 per cent to A$288m.
