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Qantas, Air NZ flag brighter outlook after price war hits profits

They expect the fierce competition to moderate with rivals adjusting capacity downwards

Published Thu, Feb 23, 2017 · 09:50 PM

Sydney

QANTAS Airways Ltd and Air New Zealand Ltd reported first-half profit declines as an expansion in capacity by rivals hit international airfares, but both airlines said they expect the fierce competition to moderate.

Shares in the carriers climbed as Air New Zealand said that it was already seeing a reduction in flights by Chinese competitors while Australia's flagship carrier forecast a much slower pace of growth in capacity in the second half.

Lower fuel prices had encouraged carriers such as American Airlines Group Inc and Qatar Airways to add flights to Australia and New Zealand, taking some of the shine off what has been a recent robust period for earnings for both firms. "We're at the high water tide mark of new competitors coming into the market place and we're really encouraged by the fact that some of our competition's already adjusting capacity downwards," Air New Zealand chief executive …

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