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Date : 22/10/2022

Qantas Airways (ASX QAN) Shares are Flying High After an Impressive Market Update

Australia’s Qantas Airways (ASX: QAN) is often identified as one of the world’s safest and most reliable airlines. In addition to being the longest continuously operating airline in the world (having taken off in 1920), the firm also has the distinction of being Australia’s most prominent airline.

Australian-based Qantas Airways (ASX: QAN) operates domestic and international flights. Qantas and Jetstar are the two main airlines of the company. Jetstar flies mostly inside Australia and New Zealand, whereas Qantas flies to international destinations.

QAN stock surged on Friday when the company released an impressive market update.

Qantas Airways Limited ASX FY22 Results

QAN shares traded at $5.80 and gained more than 3% in the previous trading session. The current market cap of the company is 10.94 Billion AUD.

ASX QAN

  1. There was a 49% drop in QAN’s total revenue compared to FY19.
  2. The company spent 38% less overall than it did in FY19.
  3. The FY22 underlying EBITDA was $281 million.
  4. The second half of 2022 generated $526 million in EBITDA.
  5. In FY22, the firm reported a loss of $1.86 billion before taxes, while the statutory loss was $1.19 billion.
  6. Operating cash flow for the year was $2.67 billion, a good figure for the company.
  7. There was a reduction in debt to $4 billion, which was lower than the $4.2-$5.2 billion forecasted range. They have cash on hand worth $3.3 billion.
  8. According to reports, the corporation would repurchase $400 million in shares on the open market.

The Reason Why Qantas Stock Price Skyrocketed

Following Friday’s announcement of a very positive market update, investors have been buying Qantas’ share price.

According to the press release, high travel demand is helping to speed up Qantas’ recovery from the COVID issue. This allows the business to continue investing to benefit its customers and employees while improving its balance sheet.

Underlying profit before tax for the first half of FY 2023 is expected to be between $1.2 billion and $1.3 billion, based on future bookings, current fuel costs, and expectations regarding the second quarter.

As a result, the total statutory losses attributable to the pandemic now stand at $7 billion after five successive halves of high losses.

Qantas also sees a good trend in its net debt, which it intends to reduce to between $3.2 billion and $3.4 billion by 31 December, below the bottom of the goal range of $3.9 billion.

According to the announcement, Qantas Loyalty forecasts first-half profits that will set a new company record. This ensures the company can achieve its EBIT goal of $425 million to $450 million for FY 2023.

QAN: Current Market Scenarios

Qantas also gave shareholders a glimpse of the current state of the tourism industry.

QAN reported demand for domestic vacations is stable or increasing. Sales for business reasons are up over 100%, while sales for leisure are up over 130% from their pre-COVID lows. Yields from overseas markets are also extremely good for Qantas, although this trend is forecast to diminish as the airline and its competitors continue to expand their fleets.

It is currently anticipated that by the end of FY 2023, Group International’s capacity will have increased from 61% of pre-COVID levels to 77%. This depends on the timely arrival of new aircraft and the capacity to retrieve more A380s from storage and complete necessary maintenance.

For the first six months, the domestic capacity of the Group will be at 94% of its pre-COVID level, and for the second six months, it will be at roughly 100%. Considering management’s intention to safeguard the continued improvement in operational performance while the larger industry recovers, this is a six percentage point reduction from earlier capacity projection.

And speaking of progress, Qantas’ punctuality and lack of cancellations have steadily increased. 75% of scheduled arrivals have been made in October so far, with just 1.7% of those scheduled arrivals being cancelled. The latter outperforms the industry standard before COVID and is a market leader. In September and October, just 6 baggage per 1000 travellers were mishandled.

While Jetstar hasn’t had nearly as much success, the company has seen significant gains in productivity this month, as reported in the press release.

Conclusion

Due to the current market research & analysis, Qantas Airways Limited ASX stock is flying high, and investors are taking a huge interest in the airline stock. The company seems optimistic about its performance, and investors are buying QAN shares. The tourism industry seems to rebound, and the numbers are above the pre-covid level, which reflects an impressive image for airline stocks.

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