Qantas wins Dreamliner compensation, H1 profit rises

SYDNEY Thu Feb 21, 2013 4:28am IST

Two Qantas planes pass each other on the runway at Sydney's Kingsford Smith International Airport May 10, 2007. REUTERS/David Gray/Files

Two Qantas planes pass each other on the runway at Sydney's Kingsford Smith International Airport May 10, 2007.

Credit: Reuters/David Gray/Files

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SYDNEY (Reuters) - Australia's flagship carrier Qantas Airways Ltd (QAN.AX) said it has received compensation from Boeing Co (BA.N) for delays in deliveries of the grounded 787 Dreamliner jet, as it reported a 10.4 percent increase in first-half profit.

Qantas said on Thursday the result included A$125 million of compensation income from Boeing because of delays by the U.S. planemaker in delivering the Dreamliner.

"The comprehensive settlement, negotiated by Qantas management, recognises the opportunity-cost to our business incurred by the delay in delivery of the B787," Qantas chief executive Alan Joyce said in a statement.

Qantas has firm orders for 14 Boeing 787-8 Dreamliner aircraft earmarked for its budget arm Jetstar and has options to order 50 of the new generation aircraft. First delivery is expected later this year.

Underlying profit before tax for the six months to December was A$223 million, compared with A$202 million a year ago.

That was in line with the carrier's guidance of A$180 million to A$230 million and slightly above analysts' average forecast of around A$216 million.

Qantas said the operating environment remained challenging and did not provide profit guidance.

The Australian carrier, battered in recent years by more nimble competitors, is banking on its ambitious plans to tap the lucrative Asian market to reverse record losses and a slumping share price.

Qantas has also embarked on a broad cost-cutting regime, axing loss-making routes, slashing staff numbers, consolidating maintenance facilities and canceling plane orders.

Qantas shares closed on Tuesday at $1.615, up from a low of A$0.96 last June. The stock has risen about 8 percent so far this year, compared with a 10 percent rise in the overall market. (Reporting By Jane Wardell; Editing by Richard Pullin)

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