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Qantas raised its full-year earnings forecast due to soaring appetite for air travel, sending its shares up more than 5 per cent to record highs.
The strong economy and an Australian dollar trading near 18-year highs also helped boost sales at travel firm Flight Centre whose shares rose 6 per cent after it forecast a 25 per cent increase in 2008 earnings.
Qantas, whose shareholders rejected a US$9 billion ($11.5 billion) buyout bid earlier this year, tipped a 40 per cent jump in 2007/08 pre-tax profit from last year's A$1.032 billion ($1.16 billion). In August, it had predicted a 30 per cent rise.
"Favourable conditions in the airline industry have continued. Capacity numbers are up, the load factor is up, yield is up and it translates through to higher profits," Shaw Stockbroking analyst Brent Mitchell said.
"Inbound has held up and outbound has increased."
The surge in demand for travel is buoying rival Virgin Blue, while new players such as Singapore's Tiger Airways and Malaysia's AirAsia are moving into Australia. Tiger Airways said it was hunting for a second hub in Australia to base its fleet.
- Reuters
