Oct. 21 (Bloomberg) -- Qantas Airways Ltd., Australia’s largest airline, said there are “encouraging signs” for passenger demand and no indications of a further deterioration in the global economy.

“The group will be ready to emerge strongly and seize the opportunities when conditions improve,” Chairman Leigh Clifford, 62, said today in Perth at the Sydney-based company’s annual shareholders meeting.

Qantas, like Singapore Airlines Ltd. and Cathay Pacific Airways Ltd., is battling a slump in business travel as the global recession prompts executives to curb travel. Chief Executive Officer Alan Joyce is two months into the airline’s most ambitious savings program since 2005, seeking to slash A$1.5 billion ($1.4 billion) of costs within three years.

“This is all about a new way of doing business to help Qantas work smarter, streamline processes and eradicate duplication,” Joyce, 43, said at the meeting.

Qantas shares rose 1 cent to A$3 at 2:28 p.m. in Sydney. The stock has advanced 14 percent this year compared with a 30 percent gain in the benchmark S&P/ASX 200 index.

Joyce plans to meet his cost-savings target with steps including cutting fuel usage by reducing taxi times, flying more direct routes and using new planes such as the Airbus SAS A380.

He is also seeking to expand business-class amenities and the company’s loyalty program to retain corporate customers, Qantas’ most profitable clients.

The company, which has more than 6 million members in its frequent flyer program, reiterated it has no plans for an initial share sale of the unit.

In response to falling demand, Joyce this year delayed delivery of some Airbus planes and canceled or deferred delivery of 30 Boeing Co. 787 Dreamliners.

After scrapping its second-half dividend in August, Clifford said the company may resume payouts when earnings recover.

To contact the reporters on this story: Robert Fenner in Canberra rfenner@bloomberg.net: Jason Scott in Perth at Jscott14@bloomberg.net;

Last Updated: October 21, 2009 00:08 EDT