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SYDNEY - Australian airline Qantas has lowered its annual profit forecast and will again cut capacity, as the global financial crisis continues to hurt demand for air travel.
Qantas now expects a pre-tax profit of around A$500 million ($603 million) for fiscal 2009, which is within the current range of analyst forecasts.
The carrier in August forecast an annual profit broadly in line with the average analyst forecast of A$751 million.
Chief executive Geoff Dixon said today that slower consumer demand had affected Qantas' mainline international operations.
As a result the airline will cut capacity equal to the grounding of 10 aircraft.
"By taking this action now we will have the flexibility to switch growth back on as soon as market conditions improve," Dixon said in a statement.
"We are in unpredictable times and the international business market, in particular, has slowed."
Dixon said Qantas' domestic operations, Jetstar, its Qantas Frequent Flyer program and Qantas Freight arm continue to perform well.
Qantas will reduce its capacity by not taking up the planned lease of two A330-200 aircraft, changing flying patterns of existing planes and halting all planned domestic market growth for Qantas and Jetstar.
"Our actual flying in the next six months will be four per cent below the equivalent period in 2008," Dixon added.
He said Qantas did not plan further job cuts beyond its previously announced plan to shed 1,500 jobs.
"We will, however, be seeking further efficiencies by implementing an accelerated leave program," he said.
Qantas chief executive designate, Alan Joyce, said the group had benefited from the recent fall in fuel prices.
But this had been offset by the global economic slowdown and reduced demand since September.
"Our fuel bill for 2008/09 will still be A$750 million higher than last year," he said.
Qantas' is currently 97 per cent hedged at a rate of US$106 ($198) a barrel, worst case.
"We have undertaken significant fuel price and foreign exchange hedging to protect against the current market volatility," Joyce said.
Joyce said Qantas continued to maintain a strong liquidity position, in terms of cash and stand-by debt facilities.
It has A$2.5 billion in cash, more than A$1 billion of underwritten facilities and A$1 billion of facilities nearing completion.
Qantas says it has limited unsecured refinancing requirements until late 2010.
It still plans to take delivery of a further two A380 aircraft in December and commence A380 services to London via Singapore in January.
- AAP