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Despite Soaring Fuel Costs, Australia's Qantas Airline Posts Record Profit


Two Australian companies - national airline Qantas and mining giant BHP Billiton - have posted record annual profits. And China' ICBC says it has become the world's most profitable bank. Claudia Blume in Hong Kong has more on these and other business stories from the Asia-Pacific region.

Despite soaring fuel costs, Australia's national flag carrier Qantas reported a 44 percent increase in annual net profit. The country's largest airline posted a profit of more than $840 million for the year ending in June.

To combat record fuel costs the airline cut jobs, slashed routes and increased fares this year.
Geoff Dixon, Qantas' chief executive, rejected suggestions that his company put the interest of shareholders before that of customers.

"We certainly put up prices where we believe we need to because of the increase in cost of oil," he said. "And I think that is not an unreasonable thing in any business anywhere in the world."

Another Australian company, mining giant BHP Billiton, also posted a record annual profit. Driven by surging commodity prices, profits rose by more than 12 percent to more than $15 billion. BHP said demand for raw materials in emerging market economies remained strong, particularly in China.

Marius Kloppers, BHP's chief executive, says he is confident that China's huge appetite for commodities will continue.

"We take a quick snapshot of the infrastructure that China still has to build," he said. "We see very strong demand for the steel-based products, iron ore, coking coal, manganese but also for energy products."

The Industrial and Commercial Bank of China - or ICBC - says it has become the world's most profitable lender after earning more than $9 billion in the first half of this year. This marked an increase of about 57 percent compared to the same period last year.

Hong Kong conglomerate Hutchison Whampoa, meanwhile, posted a 63 percent drop in net profit in the first half of this year, because it had no major asset sales. Net income in the six months until June was about $1.3 billion.

The conglomerate, which owns everything from ports to telecommunications companies, is owned by billionaire Li Ka-shing. His flagship company, Cheung Kong, saw net profit fall by 35 percent in the first six months of this year, because of lower contributions from its subsidiary, Hutchison.

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