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By Roshan Thomas
(Reuters) - Australia's flag carrier Qantas Airways on Thursday declared a special dividend for the first time in more than two decades and reported first-half profit ahead of estimates, helped by strong travel demand sending its shares over 5%.
The company announced a special dividend of 9.9 Australian cents per share, its first since fiscal 2000, according to Qantas' website.
It also declared an interim dividend of 16.5 cents per share, resuming distribution payouts for the first time since the COVID era. It last paid a final dividend of 13 cents in September 2019.
"Our financial strength means we are now in a position to pay our shareholders dividends for the first time in almost six years," Qantas CEO Vanessa Hudson said.
"The resumption of the dividend also gives confidence the business can continue to deliver strong earnings," Jefferies' analysts wrote in a note.
Shares of the carrier were up 5.7% at A$9.4 as of 2357 GMT, while the broader benchmark ASX 200 was up 0.6%.
Qantas reported an underlying profit before tax of A$1.39 billion ($875.42 million) for the six months ended December 31, beating Visible Alpha consensus estimates on the back of strong demand.
"The performance was driven by the strength of the Group's dual brand strategy with demand for travel remaining strong across all customer segments," the company said.
The Australian aviation industry has recently seen cut-throat competition with the re-emergence of Virgin Australia, which is the biggest domestic rival to Qantas.
According to a recent Australian Competition & Consumer Commission report, IPO-bound Virgin Australia held about 35% of the domestic passenger market by December-end, slightly surpassing Qantas' 34.6%, excluding Jetstar.
Earlier in the day, the Australian government approved Qatar Airways' move to buy a 25% stake in Virgin Australia from U.S. private equity firm Bain Capital.
Treasurer Jim Chalmers said the deal is expected to boost aviation competition following extensive talks with the government, industry and unions.
($1 = 1.5878 Australian dollars)
(Reporting by Roshan Thomas and Rajasik Mukherjee in Bengaluru; Editing by Shounak Dasgupta and Alan Barona)