Qantas warns on weak demand

Qantas Airways (QAN) says weak consumer confidence and business sentiment weighed on demand in its domestic division in May.

Shares in the airline fell 4.49% to $1.275 at 11.28am (AEST), against a 0.49% benchmark index fall. 

In the month, Qantas said it would pull back on its capacity focus, adding no new capacity in the first three months of the 2014-15 financial year.

Capacity fell slightly in May. Qantas' domestic division reported 3.187 billion available seat kilometres in the month, down 0.6% from 3.206 billion in May last year. 

Demand also fell in the domestic division, with revenue passenger kilometres slipping 4.5% to 2.244 billion in the month, compared with 2.349 billion in the previous corresponding period.