AIRFARES WILL INCREASE THIS YEAR, SAYS QANTAS CHIEF

MELBOURNE, Feb 18 (Bernama) -- Qantas airfares will have to increase from
"unprecedented low levels" as weak demand led to a massive drop in profit for
the airline, its chief executive has warned.

Qantas chief Ian Joyce said current airfares rates are "understandable",
given forecasts the aviation industry will lose US$5.6 billion this year.

"I think we have had unprecedented low airfares out there because of the
economic condition and the level of capacity that's there," Joyce told
journalists at the company's half-year results announcement Thursday.

"I think airfares and yields are improving, they have to improve going
forward in the international markets because most of the international industry
is losing money."

Qantas reported an underlying profit of A$267 million for the first half of
2009/10, saying the company remained profitable, unlike many airlines.

Reported profit was A$58 million, down from A$210 million in the first half
of 2008/09.

Net profit for the first half of 2009/10 was down 72 per cent, but it
expects to post an underlying profit of A$300-$400 million for the full year.

Sales and other income amounted to A$6.909 billion, down from A$8.068
billion in the prior corresponding half year.

Joyce said that Qantas had been profitable while the global aviation
industry remained in loss. Quoting the International Air Transport Association
(IATA), he said the world's airlines will record net losses of US$5.6 billion
this year.

"While the operating environment has been unprecedented and challenging,
this result reflects the strength and diversity of our operations."

Joyce said Qantas had benefited from its two-brand stategy.

"Our two-brand strategy, focused on growing the full service, premium Qantas
and low fares Jetstar, is not only delivering benefits to our customers, but
also to our shareholders," he said.

Qantas, in particular, has benefited from the capacity reductions and
restructuring activities implemented since April 2009, with substantial cost
savings achieved during the current half year, he added.
--BERNAMA