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A recent research report published by the Australian government shows that the Australian tourism industry has continued to remain a solid performer of the economy, with an increase in tourism spending to $131 billion in 2017â18. As per the report titled âState of the Industry 2017-18â, the visitor spending in Australia was around $50 billion more than the spending in 2008â09. The success of the tourism industry has been influenced by several factors, including changing economic conditions, increased prosperity of global consumers and visitor preferences.
During 2017-18, the growth of outbound trips slowed down, as the domestic travellers preferred to travel in Australia relative to overseas travel. Domestic travel became an attractive option due to increased consumer confidence, falling exchange rates, more budget travel options and low inflation during the period. The travel spending by international visitors also crossed 9 million mark for the first time, reaching $42.5 billion. It is anticipated that the visitor numbers will improve by another 3 million in the coming five years with most of them coming from Asian markets.
The Australian aviation industry has also delivered a robust performance in the last few months. As per the Australian Department of Infrastructure & Regional Development, around sixty-one international airlines performed scheduled services to and from the country in January 2019. Also, the scheduled international passenger traffic witnessed a year-on-year rise of 5.2 per cent in January, reaching 41.7 million. The department has forecasted that the airline capacity in Australia will rise by 50 per cent by 2020.
Australian Travel-Related Stocks
The travel stocks have emerged as an attractive investment option in the last few years with the growth of the travel industry in the country. Considering this, let us have a look at few of the travel-related stocks listed on the Australian Stock Exchange:
Qantas Airways Limited
The world's leading long-distance airline, Qantas Airways Limited (ASX: QAN) is one of the strongest airline brands in Australia. The airline has built a reputation for excellence in customer service, safety, engineering and maintenance, and operational reliability.
Key Update
The Qantas Group released its trading update for the third quarter of FY19 on 9th May 2019. The group reported a revenue growth of 2.3 per cent to $4.4 billion for the quarter, stating that it remains on track to fully compensate the effect of higher fuel costs relative to last year. The group also informed about the agreement signed with the Melbourne Airport during the period, for the sale of the domestic terminal. Qantas successfully settled the agreement and secured future access to the domestic terminal for $355 million.
Financial Performance
In February 2019, an interim consolidated financial report was released by the Qantas group for the six months to 31st December 2018. The group delivered a strong first half profit despite of a 27 per cent increase in its fuel bill. The Statutory Profit Before Tax was at 735 million dollars while the Underlying Profit Before Tax was at 780 million dollars. The group retrieved a significant amount of higher fuel cost with a rise of 5.7 per cent in its unit revenue.
Source: Companyâs Report (21st February 2019)
Stock Performance
QANâs stock is trading at AUD 5.800, up by 0.87 per cent relative to last closed price (12:20 PM AEST, 29 July 2019). With ~1.57 billion outstanding shares, the market capitalisation of the stock stands at AUD 9.03 billion. The stock has delivered a YTD return of -0.17 per cent while it has generated a negative return of 13.79 per cent in the last one year.
Sydney Airport
Since 1919, Sydney Airport (ASX: SYD) has remained a key driver of jobs, tourism and economic growth in New South Wales. The company has grown from the solitary flight that carried one passenger to accommodate a record number of passengers (44.4 million) in 2018. To deliver strong performance, the company has been focussing on both aeronautical and non-aeronautical businesses.
Key Update
On 19th July 2019, the company declared its traffic performance for June 2019. The number of international travellers travelling through the Airport increased by 1.1 % to 1.3 million passengers in June 2019 relative to the prior corresponding period. However, the number of domestic passengers declined by 1.6% to 2.1 million passengers, impacted by capacity reductions and subdued load factors. The top five fastest growing passenger groups were the USA, Vietnam, India, Japan and Taiwan during the month.
Financial Performance
The company reported strong performance in the financial year 2018 with a rise of 7.2 per cent in EBITDA to $1,282.6 million. The growth was seen across all the companyâs core businesses with its total revenue improving 6.8 per cent to $1,584.7 million. The total passengers saw a rise of 2.5 per cent, attaining a record number of 44.4 million passengers during the period.
Stock Performance
The stock is trading at AUD 8.240 on the ASX today with a rise of 0.24 per cent (12:20 PM AEST, 29 July 2019), close to its 52-week high value of AUD 8.420. SYD has delivered a return of 23.61 per cent on a YTD basis.
Flight Centre Travel Group Limited
Known among the worldâs largest travel agency groups, Flight Centre Travel Group Limited (ASX: FLT) operates across 23 countries. The company has a corporate travel management network that is extended to over 90 countries.
Key Update
The company notified through an ASX announcement on 1st July 2019 that it has strengthened the European corporate travel footprint by taking 100 per cent of the ownership of the corporate travel business in France and Switzerland, 3Mundi.
In April 2019, the company also lowered its profit guidance for 2018/19 fiscal year owing to the challenges faced by its Australian leisure business. The company notified that its underlying profit before tax for the year ending 30th June 2019 is expected to remain between $335 million & $360 million which was lower than the initial guidance of $390 million-$420 million.
Financial Performance
The company delivered a record total transaction value of over $1billion in its first half results of the financial year 2019. The underlying PBT of the company was within the targeted range, rising modestly to $140.4 million. However, its underlying Net profit after tax was at $101.1million during the period.
FLTâs TTV Gaining Momentum, Source: Companyâs Presentation (21st February 2019)
Stock Performance
FLTâs stock is trading at AUD 46.940, up by 2.16 per cent compared to the previous closed price (12:20 PM AEST, 29 July 2019). The stock has a market capitalisation of AUD 4.65 billion. The stock has delivered a return of 13.49 per cent on a YTD basis and a return of 6.33 per cent during the last six months.
Disclaimer
This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.
