Farewell to first-class as Qantas makes tough call

SYDNEY: Qantas Airways Ltd, Australia's biggest airline, will scrap first-class cabins on most routes after a slump in demand for its most expensive seats led to a 72 percent drop in first-half profit.

The carrier fell the most in 10 months in Sydney trading after saying net income was A$58 million ($52 million) in the six months ended Dec 31, missing the A$82 million median estimate of five analysts surveyed by Bloomberg News. The airline will begin a A$400 million project to change seats and upgrade inflight entertainment systems next year, it said in a statement yesterday.

The cabin changes, which will see first-class disappear on flights to Hong Kong and Johannesburg, come as business customers shift to cheaper seats or the company's budget carrier Jetstar, where earnings almost tripled. Qantas forecast annual pretax earnings of A$400 million, trailing behind analysts' estimates for about A$530 million, because of rising fuel costs.