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Qantas Airways said on Thursday it might hive off some businesses or return billions of dollars to shareholders as it finds its feet following a failed USD$9 billion takeover bid.

Qantas told investors it was reviewing ownership of its frequent flyer program and might sell off its express freight joint venture and other operations as part of a «de-merger» option being considered to return capital to shareholders.

Qantas shares hit a record high, rising 2.2 percent to A$5.54 by 0253 GMT after the airline reaffirmed previous profit guidance and outlined the options it was considering under a capital management strategy review.

This was above the AUD$5.45 a share offered by a consortium whose bid came unhinged earlier this month after failing to get enough shareholder acceptances to keep the offer alive.

«They are pursuing opportunities to expand and improve the business but they do realize there are risks going forward from competition and fuel price increases,» Shaw Stockbroking analyst Brent Mitchell said, who attended the briefing.

Qantas was briefing investors for the first time since the bid collapse and two board members bailed amid heavy criticism of the way management handled the takeover.

«I am confident that stability will be forthcoming for Qantas,» Chief Executive Geoff Dixon told investors, in a delayed webcast of the briefing.

The airline said in a series of slide presentations that alternatives it was considering included shareholder distributions via dividend policy, share buyback or de-merger some businesses.

«We are also looking at growth opportunities, which are real particularly in some of our portfolio business. Any acquisitions would be on a small scale,» Dixon said.

Analysts said management pointed to the possible sale of its express freight joint venture with Australia Post and other businesses, but did not plan to hive off its low-cost subsidiary Jetstar.

Analysts have said the airline could raise more than AUD$3 billion (USD$2.47 billion) by selling its freight, maintenance and catering businesses.

UBS, which raised its rating on Qantas this week, said a de-merger of the frequent flyer program could add 70 cents per share in value to the airline.

Qantas executives told the briefing it had hedged 51 percent of its fuel requirements for fiscal 2008, and its outlook for the current year was in line with previous guidance. It expected international capacity to grow 4 percent in the next 12 months and expand further once new superjumbo A380s are delivered.

It was also looking to expand its air freight businesses domestically and internationally. It was looking at a freight acquisition in Asia.

Qantas said in the briefing slides that the current operating environment was favorable, and it expected the conditions to continue for 12 to 18 months.

However, it said the entry of Singaporean carrier Tiger Airways and other offshore carriers into Australia would hit capacity.

Chairman Margaret Jackson announced last week she would quit the airline amid criticism of how she handled the failed takeover.

(Reuters)