Morgan Stanley slashes Qantas profit forecast

Morgan Stanley has slashed its forecasts for Qantas’s 2016 profit result by 6% and its 2017 result by 19% on the back of falling prices for international airfares. Pointing to a spate of recent carrier downgrades on the back of reduced capacity, Morgan Stanley analyst Nick Markiewicz said deteriorating international yields would raise earnings risks at Qantas over the next 12 months. As Qantas does not report international yield on a quarterly basis, the Morgan Stanley analysts looked to international peers as a proxy and found Air NZ and SIA over Q1 of this year took a hit to their international yields which fell 5% and 7% respectively. “Negative yield growth does not appear to have found a floor, pointing to tough international conditions ahead,” Mickiewicz said. <br/>