Qantas Airways Ltd said it will beat its pretax profit forecast for the business year ending June 30, 2002 by more than 10 percent, triggering the stock's biggest gain in almost four months.
The shares rose as much as 6.6 percent to A$4.66 after Chief Executive Officer Geoff Dixon said in a statement to the Australian Stock Exchange that the country's dominant airline will beat its A$550 million (US$316 million) pretax profit forecast for the year. He didn't give a revised forecast.
"A faster recovery in the international aviation market, solid domestic performance and improved overall productivity" helped bolster the carrier's earnings, Dixon said.
Qantas controls 80 percent of the country's aviation market following the collapse of Ansett Holdings Ltd, formerly its biggest rival, in September. Plans to revive Ansett failed in February. Virgin Blue Airlines Pty now has about 18 percent of the market.
The increased profit outlook "is something which we have anticipated, with their very, very strong domestic market position and good management of the international routes," said Paul Stephen, Director of Corporate and Infrastructure Ratings at Standard & Poor's in Melbourne.
Qantas shares recently traded at A$4.59, up 5 percent for the day.
Qantas has said it will spend an average A$2.5 billion per year in the four years to 2005 on new aircraft, upgraded lounges, and product improvements such as beds on international flights.
The airline is in talks with Boeing Co. and Airbus SAS to buy additional aircraft as part of a fleet renewal and expansion plan announced in October.
In October, Qantas said it agreed to buy 15 Boeing 737-800 aircraft for A$1.5 billion, with deliveries slated between January and July 2002. The airline took options on another 60 aircraft to replace its older 737-300 and 737-400 aircraft, and may now convert some of these into firm orders.
"We are talking to Boeing and Airbus" about buying more planes, Qantas spokesman Michael Sharp said.
"We are talking to Boeing about the possibility of getting some more 737-800s and to Airbus about maybe some A330s."
A decision is expected "in a few months," he said.
The Australian Financial Review reported Qantas would invest as much as A$1.5 billion on as many as 15 Boeing 737-800 aircraft and as many as three A330 planes from Airbus for domestic routes.
Sharp wouldn't comment on the number of additional planes or their value.
"The situation at the moment is that airlines around the world who had ordered aircraft no longer need those," Sharp said.
"So there are opportunities for us."
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