AUS
NZ
UK
CA
USA
IND
Highlights
- Qantas offers international and domestic transportation services along with freight services
- Due to higher passenger and other revenues, QAN’s revenue in 1HFY24 increased to AUD 11,127 million
- John Mullen to join QAN’s board as non-executive director and chairman elect
Qantas Airways Limited (ASX:QAN) is an ASX-listed transportation company which offers domestic and international airline services. Moreover, the company is engaged in selling domestic and international holiday tours and related support services such as information technology, catering, maintenance and ground handling and engineering.
In the first half of financial year 2024 (1HFY24), the company witnessed a rise in its revenue to AUD 11,127 million, compared to AUD 9,909 million in previous corresponding period (pcp). The revenue growth was backed by higher passenger and other revenues.
The company’s EBIT, during the reported period, declined to AUD 1,345 million, compared to 1,551 million pcp, due to higher operating expenditure. In 1HFY24, QAN reported a 5% YoY increase in its flying activities as growth in business travel continued and there were continuous demand from premium leisure activities.
December quarter WPI bodes well for consumer sector
According to the seasonally adjusted data published by the Australian Bureau of Statistics (ABS), in December 2023 quarter, Australia’s wage price index (WPI) increased by 0.9% sequentially and 4.2% annually December quarter annual wage growth rate is the highest yearly growth since March 2009
ABS data showed that in November 2023, average weekly ordinary time earnings for full-time adults was AUD 1,888.80, representing a rise of 4.5% on annual basis. It is the strongest annual increase since May 2013.
A positive increase in wages might influence spending patterns, resulting in an increase in demand for discretionary goods and services.
Moreover, Australia’s appeal as a tourist destination can drive leisure and hospitality sectors of the nation, which would lead to increase in demand for discretionary spending.
Recent business update
Through an ASX update dated 21 February 2024, the company informed about the appointment of John Mullen as non-executive director and chairman elect of the company. Mullen would take up his role from 1 July 2024 and from October, he would take up the responsibilities of the Chairman. The appointment came as part of a continuous renewal process of Qantas.
Outlook
In 2HFY24, the company expects to see robust demand. Considering the current fuel prices and hedging arrangements, expected fuel costs for the year is likely to be nearly AUD 5.4 billion. In FY24, expected net capital spending is AUD 3 – 3.2 billion and in FY25, it is expected to be in the range of AUD 3.7 – 3.9 billion.
As per the long-term growth strategy of the firm, the company targets to achieve AUD 500 – 550 million in underlying EBIT in FY24 for the Qantas Loyalty segment.
Share performance of QAN
QAN shares closed 2.08% lower at AUD 5.19 apiece on 26 February 2024. In the last 12 months, QAN’s share price has declined by 15.77%, while in the past six months, it has decreased by almost 15.20%.
The 52-week high of QAN is AUD 6.94, recorded on 5 April 2023, while the 52-week low is AUD 4.67, recorded on 20 October 2023.
QAN Daily Technical Chart, Source: EODHD/Others
Note 1: Past performance is neither an Indicator nor a guarantee of future performance.
Note 2: The reference date for all price data, and currency, is 26 February 2024. The reference data in this report has been partly sourced from EODHD/Others.
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