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Fri, Feb 09, 2007 - Page 10 News List

Qantas Airways sees higher profits

SOARING For the second time since December, the airline raised its forecast, confirming the carrier as one of the few profitable companies in the industry

AP , SYDNEY

Qantas Airways Ltd raised its profit forecast for the second time since December yesterday after reporting a 1.7 percent rise in net profit for the first half of its financial year.

The result confirmed Australian airline as one of few major international carriers to be profitable and came less than a week after a private investment group formally launched its A$11.1 billion (US$8.6 billion) bid to take it over.

Qantas' board recommended the takeover deal to shareholders, 90 percent of whom must support it for it to succeed. The bid was made by Airline Partners Australia, a group led by Australia's Macquarie Bank and the Fort Worth-based Texas Pacific Group.

The airline reported a net profit of A$358.7 million in the six months through December, up slightly from A$352.8 million in the same period a year earlier.

Chairwoman Margaret Jackson said strong passenger demand and efficiency improvements at Qantas in the past three years were among the reasons.

The company, which on Dec. 1 raised its full-year net profit forecast to up to 30 percent more than the previous fiscal year, upgraded that to as much as 40 percent yesterday.

"We believe that the full-year result will be around 30 percent to 40 percent higher than last year's result subject to fuel costs not increasing significantly, demand continuing to grow and cost reductions not achieved in the first-half being realized in the second half," the airline said in a statement.

Qantas didn't cite a figure for its forecast, but a 40 percent increase would bring full-year profit to A$670 million from A$479.5 million for the fiscal year ended June 30, last year, when profit fell 30 percent on skyrocketing fuel costs.

The takeover bid, which is being reviewed by government regulators the Foreign Investment Review Board and the Australian Competition and Consumer Commission, closes March 9.

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