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Qantas shares are up after the Australian airline forecast its second-highest full-year profit on record as the performance of its domestic operations improved and competition in the international market eased.

In its third quarter trading update released after market close on Thursday, Australia’s national carrier said it expected to book an underlying profit before tax in the range of A$1.35bn to A$1.4bn ($1bn to $1.04bn), which would trail only the record A$1.53bn booked in the 12 months to June 30 last year.

Alan Joyce, chief executive, said the Flying Kangaroo’s quarterly performance laid the groundwork for another strong full-year result, adding:

Internationally it’s still tough, with high levels of capacity growth pushing fares down, but we’ve seen those conditions ease slightly. Because of the work we’ve done to transform Qantas and expand into growth markets, our international businesses are navigating the headwinds better than our key competitors.

Shares were up 2 per cent in Sydney at A$4.51, eyeing the first close above A$4.50 since January 2008. The company’s stock price has gone without a decline since April 21 and is up 35.6 per cent so far this year.

Copyright The Financial Times Limited 2017. All rights reserved.
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