Qantas expected to report $120m profit

Qantas Airways Ltd is expected post a pre-tax profit for the first half of 2009/10
after passenger numbers grew and yields recovered in the aftermath of the global
recession.
Goldman Sachs JBWere estimates Qantas will post a pre-tax profit of $121 million.
"We are beginning to see evidence of an improvement in yields (a key earnings
driver) which we expect to continue into 2H FY10 given the recent domestic and
international ticket price rises," Goldman Sachs JBWere analyst Andrew Gibson wrote
in a research note.
Credit Suisse has forecast pre-tax profit of $142.4 million and said the result was
"likely to be supported by earnings from frequent flyer and mark-to-market open
hedge positions".
"We expect the focus will be the quality of earnings from the flying business and
the level of cost savings delivered," Credit Suisse research analyst Anthony Moulder
said in a report.
If the outcome is in line with market expectations, it would be well down from the
$288 million pre-tax profit Qantas recorded in the previous corresponding period.
But it would mark a step forward from the airline's $107 million loss in the second
half of 2008/09.
The airline was also tipped to announce details of a fleet reconfiguration.
The company said in December it expected pre-tax profit to come in between a wide
band of $50 million and $150 million for the six months to December 31, 2009.
"Operating conditions have improved when compared to the second half of the 2008/09
financial year, with passenger volumes and yield improving," the airline said in
December.
Qantas chief executive Alan Joyce said recently the biggest challenges for the
airline was volatility in oil prices and foreign exchange, as well as the durability
of the economic recovery in its major markets.
But Mr Joyce believed Qantas was in a great position compared with its peers.
"For an airline to make money in those circumstances is a very good performance and
Qantas is still making money," Mr Joyce told the Sky News Business Channel.
"So our head is above water when most of our competitors are losing a lot of money."
The International Air Transport Association, which represents about 230 carriers,
most recently estimated that the airline industry would rack up losses of $US11
billion ($A12.19 billion) in 2009 and $US5.6 billion ($A6.21 billion) in 2010.
Qantas, which celebrates its 90th anniversary this year and is believed to be the
oldest continuous operating airline in the world, is due to release its first half
results at 0900 AEDT on Thursday.