Australia's Qantas sees profit rise 44 percent

Thu Aug 21, 2008 1:42 AM EDT

SYDNEY — Qantas Airways Ltd. reported Thursday a 44 percent rise in annual net profit, but acknowledged it is beginning to feel the effect of a slowing economy and higher fuel costs.

Australia's largest airline posted a net profit of 969 million Australian dollars ($847 million) for the year ended June 30, up from A$673 million ($588 million) the previous year. The result was slightly lower than market forecasts of A$1.02 billion ($891 million).

Sales rose 7.5 percent to A$16.2 billion ($14.2 billion) from A$15.1 billion ($13.2 billion) a year ago.

The Sydney-based company has implemented a number of measures to combat record jet fuel prices, including increased fares, fewer routes and fuel hedging.

"The rapid rise in fuel costs since December last year is unprecedented and the impact has been felt across the aviation industry and the world economy," Chief Executive Geoff Dixon said in a statement.

Dixon predicted fuel costs for the airline would rise by A$1.6 billion ($1.4 billion) in the current fiscal year.

Dixon also acknowledged the recent spate of problems that have plagued the airline, including an explosion on board a Qantas jumbo jet in the Philippines last month that forced an emergency landing.

"We understand the level of scrutiny we are being subjected to at present," he said. "We will work through these issues and implement any changes that may be required, but our commitment to safety should never be questioned."