Qantas warns on weak demand

Shares fall as airline blames soft consumer confidence, business sentiment.

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.

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