Qantas issues profit warning and revises Asia plans

Qantas boss Alan Joyce has told the markets that the airline expects its first-half profit to plummet after taking a series of hits related to fuel costs and industrial strife.

Joyce reckons the number will come in somewhere between A$140 and $190 milion, compared to last year's first half of $417 million.

The aggregate impact of fuel, fleet grounding and the fall out from that was put at $650 million.

Despite the sorry numbers, Joyce continues to talk confidently about the path forward from here - and institutional shareholders clearly believe him, with the share price heading in a positive direction, at least so far.

Joyce described forward bookings on the domestic front as "back to normal levels"; and international bookings as "in line with normal trends" (though that last is open to some interpretation).

More predictably perhaps Joyce has also revealed a revision of strategy for the Asian region, with an at least temporary pull-back from the launch of a new premium carrier.

Instead the airline group is steering towards a tie up with Malaysian Airlines and some hubbing through Kuala Lumpur.

The Malaysian strategy has been a likely outcome for some time as it would have obvious benefits for both parties.

And the involvement of new Malaysian Airlines powerbroker and entrepreneur Tony Fernandes can only be a plus.

The downside perhaps is the (partial?) loss of Singapore, but Changi was never going to work as a pan-Asian solution, given the strength of the indigenous airline there; and tha fact that SIA has some scores to settle with the Australian carrier.

Clearly there's some detail to be ironed out in the Malaysian deal, but one has to suspect that a lot of the groundwork has in fact been done and that we are being fed piecemeal at this stage.