Australia's national airline Qantas today reported a 66% fall in first-half profits and denied that a plan to raise cash through a share issue was aimed at acquiring other airlines.
Net profit for the six months to December 31 fell to $210m Australian dollars ($137m) - slightly higher than analysts' forecasts - the airline said in a statement.
Qantas also announced it would raise A$500m from an institutional placement and would allow other shareholders to subscribe for up to A$10,000 worth of ordinary shares through a share purchase plan.
The capital raising, coupled with the airline's A$2.8 billion in cash, was 'not us bulking up for acquisitions,' CEO Alan Joyce said.
There has been speculation that Qantas will seek a tie-up with an Asian airline after the collapse of merger negotiations with British Airways in December.
'We're not actively involved in any merger negotiations, we are focused in on our core business and we think in the current environment that's important for us to do,' Joyce said.
The capital will be used to support a A$35 billion fleet renewal programme, reduce net debt, and support its investment grade credit rating, Qantas said.
Joyce said that while Qantas was not immune to the global economic downturn it was better placed than many of the recently failed airlines because of its high degree of structural flexibility.
'With two flying brands and a diversified portfolio of businesses, the group has the scale and scope to respond rapidly to market developments and will be well-positioned to resume growth as soon as conditions improve,' said Joyce.
The airline last year implemented two rounds of capacity cuts and sacked 1,500 workers as the global financial crisis hurt passenger demand. Group revenue rose 1.7% to A$7.92 billion but passenger revenue from its flying businesses fell 0.7% to A$6.4 billion.
Pre-tax profit was A$288m and Qantas reaffirmed its full-year forecast of around A$500m profit before tax. The airline declared an interim dividend of six cents a share, down from 18 cents.
