Qantas
Qantas Airways Ltd Chief Executive Alan Joyce speaks during a news conference in Sydney August 28, 2014. Qantas Airways Ltd on Thursday reported its biggest financial loss ever after taking a hefty A$2.6 billion writedown due to a company restructure that includes a re-valuing of its fleet. Qantas, which formed an alliance with Emirates Airline last year in an effort to trim losses on international routes, posted a statutory net loss of A$2.8 billion ($2.6 billion) for the year to June 30, compared with a restated profit of A$2 millon a year ago. Reuters/David Gray

Australia’s Qantas Airways has forecast an impressive first-half underlying profit before tax in the range of $875 million to $925 million, surpassing the analysts' expectations. In fact the airline is nearly matching the half yearly pre-tax profits with that of the $975 million pretax profit it posted for the full 2015 financial year. Encomiums are coming for the remarkable financial performance that will be formally announced later.

The new profit guidance will be helping the airline to restore its investment grade credit rating from Moody's and offer savings in its interest bill by $70 million. In the view of Merrill Lynch analyst Matthew Spence, the airline may launch around $500 million to $800 million buyback, reports The Sydney Morning Herald.

“Qantas continues to generate revenue growth and cost outs in a generally tough environment for Australian industrial companies,” he said after reviewing the guidance released on Tuesday.

Core business

The top brass of Qantas attributes the strong performance to the airline's core businesses that performed well in the six months that will be ending December 31.

“We've seen improved revenue in our domestic and international operations, reduced costs across the group through the Qantas transformation program, and expect another record half-year result from Qantas Loyalty,” Chief executive Alan Joyce said.

In a recent forecast, Deutsche Bank said Qantas would report a first-half profit before tax of just over $900 million, up by 150 percent compared to the previous fiscal. It said the turnaround is the result of lower fuel costs and an offshoot of its transformation program.

According to many analysts, Qantas earns more in the first half of the year than the second half. The airline’s last record profit was in 2008 fiscal at $1.4 billion. Given the new surge in earnings, the airline may post a record $1.64 billion profit before tax for the current year ending June 30, 2016.

Woolworth’s deal

In another surprise move, Qantas persuaded retailer Woolworths to renew its reward scheme partnership in less than two months after the supermarket reworked the loyalty program to ditch frequent flyer points, reports AAP.

According to the latest update from the supermarket giant, customers will still earn the “Woolworths Dollars” as they spend. But the unique point is that it will automatically convert into Qantas points, starting from the New Year.

"This fantastic outcome means Woolworths Rewards is 100 percent relevant to all Woolworth’s customers, while also offering the best frequent flyer partnership in Australian supermarkets," Woolworths managing director Brad Banducci said.

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