Qantas Airways, Australia's largest carrier, says it is is well placed to manage the volatile era as the global financial crisis continues to reduce demand for air travel.
Qantas chairman Leigh Clifford told shareholders at the company's annual meeting in Brisbane that the carrier faced difficult economic conditions.
But he said Qantas has ''immense strengths'' with its two-brand strategy, a strong balance sheet and a portfolio of efficient businesses, adding that ''...even in these exceptionally challenging times, Qantas is well placed to succeed.''
In early afternoon trading, Qantas shares lagged gains in the overall market, losing 3 cents, or 1.3%, at $2.32.
Mr Clifford said the carrier had seen a decline in travel demand over past weeks, especially in international markets.
''Qantas has seen a deterioration in booking intakes over recent weeks, particularly in international markets reflecting this challenging global economic environment and the impact of exchange rate movements.''
Mr Clifford said the restructuring of the aviation industry globally would exert competitive pressures on Qantas.
''But few airlines can be better placed than Qantas to manage through this volatile era,'' he said.
It was difficult to predict how long the crisis would last and the impact it would have on Qantas.
''Looking ahead, there is no doubt that the Qantas Group faces an extremely challenging environment.
''The global financial crisis is still playing out and a major global economic slowdown is underway.
''It is impossible to predict how long the crisis will last or what specific implications it will have for economies around the world, for the Australian economy, and for the Qantas Group in particular.
''What we do know is that the Qantas Group must deal with high degrees of volatility in both the fuel price and in foreign exchange values.''
Mr Clifford said the latest announcements of capacity reductions would position the carrier to emerge even stronger from this downturn, ready to resume growth when the market improved.
On Tuesday, Qantas slashed its profit forecast for 2008/09 and said it would cut capacity further as the global financial crisis constrained demand for air travel.
Qantas said it now expects pre-tax profit to fall 64% to around $500 million in the year to June 2009 from $1.4 billion in fiscal 2008.
Retiring Qantas chief executive Geoff Dixon, who hands over to Jetstar's boss Alan Joyce following the annual meeting, said Mr Joyce was taking up the position at a challenging time.
Mr Dixon said the next step forward for Qantas would be to participate in consolidation of the aviation industry.
''The goal will be to position Qantas for the full modernisation of the industry, and enable this great Australian company to succeed as a great global enterprise,'' he said.
Mr Dixon said he leaves Qantas ''very confident indeed of its soundness as a business''.
AAP
