Qantas poised for more capital returns in August

Qantas Airways, which could complete a A$500m on-market buyback by the end of this week, looks increasingly likely to return more cash to shareholders with its full-year results in August despite its recent warning of tougher market conditions. By the close of trading on Tuesday, Qantas had purchased $485.26m worth of shares as part of a buyback program launched alongside its half-year results in February. On Tuesday, it purchased $6.88m of shares, and if that pace continues, the buyback would be finished by Friday. Qantas has paid an average of $3.49 a share, which is higher than Tuesday's closing price of $2.93. Qantas shares had reached $4.16 on April 4 but later plunged after a warning on April 18 that domestic and international market conditions were proving tougher than expected. Brokers slashed their consensus forecasts for the airline's full-year earnings by 9% in the wake of the update, with many warning it would probably take a more conservative approach to capital management. Brokers expect Qantas will report an underlying pretax profit of a record $1.6b. But Qantas last week said its decision to cut capacity in the domestic market – a move also being taken by rival Virgin Australia – had helped lead to a rebound in airfares. Macquarie Equities said concerns from investors about Qantas continuing to increase international capacity despite the cut to domestic capacity were overdone.<br/>