Qantas Says Overseas Rivalry Is Easing as Capacity Growth Halves

(Bloomberg) -- Qantas Airways Ltd. 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 percent in the fiscal second half ending June, Sydney-based Qantas said in a statement Thursday. That compares with the 11 percent 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 ($999 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.

To contact the reporter on this story: Angus Whitley in Sydney at awhitley1@bloomberg.net.

To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net, Lena Lee