Expects underlying EBIT loss of $788 mln Boosted liquidity...

• Expects underlying EBIT loss of $788 mln
• Boosted liquidity through sale of land near Sydney Airport
• Domestic airlines gearing up for price war in H2

(Recasts, adds CEO comment)

SYDNEY, Dec 16 (Reuters) - Qantas Airways Ltd (QAN) said on Thursday it expects domestic competition to intensify in the second half of the financial year as state borders open after forecasting a first-half loss due to months of lockdowns.

The airline, which separately said it would switch its narrowbody fleet to Airbus SE AIR.PA jets from Boeing Co BA.N , forecast a first-half underlying loss before interest and tax of more than A$1.1 billion ($788 million).

Qantas said it boosted its liquidity position during the half through the A$802 million sale of land near Sydney Airport. It expected to have A$5.6 billion of net debt as of Dec. 31, the end of the first half of its financial year.

"We have significantly reduced our cost base which improves our ability to recover," Qantas Chief Executive Alan Joyce said in a statement.

Australia's domestic airline industry, held back during the pandemic by state border closings, is gearing up for a price war as new entrants into the jet market challenge Qantas and its biggest rival, Virgin Australia.

($1 = 1.3959 Australian dollars)