Qantas says overseas rivalry is easing as capacity growth halves

Qantas sees competitors slowing capacity growth, which would ease things for the Australian carrier.
Qantas sees competitors slowing capacity growth, which would ease things for the Australian carrier.PHOTO: REUTERS

SYDNEY (BLOOMBERG) - Qantas Airways predicted rivals would slow capacity growth by more than half, easing competition for the Australian flagship carrier on international routes.

Overseas carriers are projected to increase capacity by about 5 per cent in the fiscal second half ending June, Qantas said in a statement Thursday. That compares with the 11 per cent capacity growth that Qantas estimated for rivals for the first half.

"Internationally it's still tough, with high levels of capacity growth pushing fares down, but we've seen those conditions ease slightly," chief executive officer Alan Joyce said in the statement.

The softening of competition and improvement in the domestic business won't be enough to lift Qantas's full-year earnings.

The company said full-year underlying profit before tax will fall to between A$1.35 billion (S$1.39 million) and A$1.4 billion. That's down from a record A$1.53 billion in the 12 months ended June 2016.

Qantas is due to hold its investor day Friday.