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Last Updated: Thursday, 16 August 2007, 10:19 GMT 11:19 UK
Full planes boost Qantas profits
Qantas jets
The takeover bid was opposed by many in Australia
Australian airline Qantas has reported its highest annual profit to date, as strong passenger numbers offset a rise in the price of aviation fuel.

The firm, which was the subject of a failed takeover attempt in May, made an annual profit of 1bn Australian dollars ($795m; 401m), a 54% rise.

Qantas, whose board backed the takeover despite shareholder anger, said it would now buy back 10% of its stock.

The move will return more than A$1bn to Qantas shareholders.

Qantas' total revenues for the 12 months were A$15.2bn, an 11% rise on the previous 12 months.

US investigation

Looking ahead, the airline said it expected profits to rise by a further 30% in the coming year thanks to high passenger numbers.

It added that an increasing amount of this income would come from its low-cost subsidiary Jetstar.

Qantas also said it had put aside A$47m to cover a possible fine in the US for involvement in an alleged freight cartel.

Its chief executive Geoff Dixon said the airline was embarrassed to be implicated, but was co-operating with US investigators.

"I think what really happened is that it moved from being something that people thought was OK, to being something that is absolutely wrong, and we understand that," he said.

'Flying Kangaroo'

The Airline Partners Australia (APA) consortium that tried and failed to buy Qantas had offered A$11bn for the airline.

Led by Australian bank Macquarie, it also included US private equity group Texas Pacific and Canadian firm Onex Corporation.

Despite the backing of the Qantas board, and the Australian government's pledge not to intervene, it failed in the face of extensive shareholder and political opposition.

Despite Macquarie having a majority stake in APA, many in Australia did not want to see their iconic airline, dubbed the "Flying Kangaroo", falling into foreign hands.

Qantas faces tougher competition

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03 May 07 |  Business

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