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Highlights
- Qantas gains momentum on ASX300
- Jetstar Asia exit to recycle $500 million capital
- Positive outlook on future earnings potential
Qantas (ASX:QAN) emerged as a standout performer on the ASX300, regaining investor interest after announcing the closure of its subsidiary, Jetstar Asia. The decision, which follows sustained challenges in the competitive intra-Asia aviation market, is part of a strategic recalibration aimed at strengthening the group’s regional operations.
On Wednesday, Qantas shares dipped by 3%, closing at AUD 10.50 after revealing the plan to wind down Jetstar Asia. However, by Thursday morning (11:18am AEST), the share price rebounded 4.4% to AUD 10.96, positioning Qantas as one of the top gainers on the ASX 200. This sharp recovery signals renewed market optimism as the company focuses on redeploying resources and improving efficiency.
The shutdown of Jetstar Asia, scheduled to be completed by 31 July, is expected to release around AUD 500 million in capital. This will enable Qantas to reallocate aircraft capacity to stronger-performing routes in Australia and New Zealand. While the move will result in the loss of approximately 500 jobs, it is projected to enhance underlying earnings by AUD 175 million—about one-third of this uplift anticipated in FY25 and the remaining across FY26.
The operational pivot is seen as a proactive measure to address overcapacity and margin pressure in Asian markets. By streamlining its fleet and investing in core domestic and trans-Tasman routes, Qantas aims to build resilience and improve financial performance. The decision also aligns with ongoing cost-saving strategies and an increased focus on high-demand routes.
This development comes at a time when the ASX300 index continues to reflect broader market momentum. Qantas’s rebound and strategic changes reinforce its place within the index’s top industrials and transportation stocks.
Market forecasts for Qantas have improved following the announcement. Analysts cite increased earnings projections and a more efficient capital deployment outlook as contributing factors. The anticipated benefits from reduced fuel expenses and trimmed capital expenditure in future fiscal years also support this perspective.
Qantas’s decision underscores a broader industry shift toward leaner, more agile operations. With improved financial visibility and sharpened strategic focus, the airline appears poised to navigate upcoming quarters with greater stability and potential growth.
