Qantas Airways, Australia's biggest airline, on Thursday posted a 7.5 percent fall in first-half underlying profit and deferred deliveries of Airbus aircraft as international competition intensified and domestic market conditions remained weak.
Underlying pre-tax profit, its most closely watched measure, totaled A$852 million ($656 million) for the six months to Dec. 31, down from A$921 million a year earlier but ahead of the guidance range of A$800 million to A$850 million given in October.
"In the international market, conditions are challenging," Qantas Chief Executive Alan Joyce said in a statement. "As travellers are very much aware, cheaper oil has led to strong capacity growth on international routes - pushing fares down and impacting all major airlines."
International rivals Cathay Pacific Airways, Singapore Airlines and Air New Zealand have also reported a decline in profits in their passenger businesses as airfares fall due to overcapacity on key routes.