* H1 underlying profit before tax A$223 mln vs A$202 mln
* Result includes A$125 mln in Dreamliner compensation
* Shares rise 4 pct to 10-month high
SYDNEY, Feb 21 Australia's Qantas Airways Ltd
reported a 10.4 percent rise in first-half profit on
Thursday, as a turnaround of its loss-making international
operations gathers pace.
The result included A$125 million ($128.63 million)in
compensation for delays in delivery of Boeing Co's
troubled Dreamliner, part of a package negotiated before the
latest series of problems affecting the grounded jet.
Qantas, which has been battling high fuel costs, tough
competition and a strong Australian dollar that has dented
tourism spending, said the operating environment remained
challenging and did not provide full-year profit guidance.
Underlying profit before tax for the six months to December
rose to A$223 million from A$202 million a year ago, in line
with its guidance and slightly above analysts' average forecast
of around A$216 million.
Shares in the carrier rose to a 10-month high in early
trade, the biggest gainer in a weaker S&P/ASX 200 index.
Qantas, which reported its first full-year net loss in 17
years last year, has embarked on a broad cost-cutting regime,
axing loss-making routes, slashing staff numbers, consolidating
maintenance facilities and canceling plane orders.
Chief Executive Alan Joyce also has ambitious plans to tap
the lucrative Asian market, spearheaded by an alliance with
Dubai's Emirates which is due to receive final
approval from Australian regulators next month.
Joyce said all parts of the group were profitable in the six
months to end-December, except for the international arm, which
reduced losses by 65 percent compared with a year earlier.
"We have now passed a turning point as we continue to
deliver the transformation of Qantas," Joyce told reporters.
Qantas cancelled orders for 35 Dreamliners in August last
year as part of its cost-cutting exercise, and said then it
would receive more than A$300 million from Boeing Co due
to delays in delivery.
The carrier still has firm orders for 14 Boeing 787-8
Dreamliner aircraft earmarked for its budget arm Jetstar and has
options to order 50 of the new generation aircraft.
The Dreamliner fleet has been grounded for the past five
weeks due problems with battery failure, compounding pressures
caused by earlier delays in 787 deliveries.
Joyce said Qantas had received no formal notice of any delay
to the delivery of the first plane, due in August this year.
"We think the aircraft is still going to be a great
aircraft," he told reporters.
Qantas shares rose 4.3 percent in early trade to $1.69,
their highest level since April last year and well off an
all-time low of A$0.96 last June.