Qantas to restore flights dumped in financial crisis

Australian airline Qantas on Monday said it would begin restoring services cut during the economic downturn, as it forecast profits of up to 150 million dollars (133 million US) for the latest half-year.

Australian airline Qantas on Monday said it would begin restoring services cut during the economic downturn, as it forecast profits of up to 150 million dollars (133 million US) for the latest half-year.

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Qantas chief executive Alan Joyce said the airline would add more than 340,000 seats starting in March on domestic routes amid growing passenger numbers as the world emerges from the global financial crisis.

"We are seeing some improvements in domestic demand and so the time is right to begin restoring capacity to ensure we are well placed to meet that demand," Joyce said.

The airline said it expected to post a pre-tax profit for the six months to December 31, 2009 of between 50 million dollars and 150 million dollars.

Although well below the 288 million dollar pre-tax profit of the previous corresponding period, it would mark a turnaround from the 107 million dollar loss endured in the second half of 2008/09.

"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 a statement.

The airline warned "high levels of volatility" remained in the economic outlook, passenger demand, fuel prices and exchange rates but Qantas shares jumped on the news, closing up 14 cents, or 5.11 per cent, at 2.88 dollars.

Qantas said the restored services would be on domestic flights to Melbourne, Sydney, Townsville, Perth, Ayers Rock, Cairns, Adelaide and Brisbane and introduced over a 12 month period.

"The changes will see the addition of a total 19 return services across selected routes, while capacity will be restored on others by upgrading from Boeing 737 to larger Boeing 767 aircraft," Joyce said.

Qantas slashed capacity in 2008 as a result of soaring fuel prices and dampened passenger demand.

The airline cut capacity by five percent in May of that year, later further reducing capacity by the equivalent of grounding 10 aircraft to cope with the slump in passenger demand caused by the global slowdown.

"We will continue to monitor demand with a view to restoring further capacity at the appropriate time," Joyce added.