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Highlights
Record Performance: Qantas shares reached a new all-time high following a positive trading update during the recent AGM.
Strong Revenue Growth: The company reported strong performance in domestic travel, contributing to a significant rebound since the pandemic.
Broker Sentiment: Analysis from major brokers reflects a generally positive outlook on QAN, with many recommending the stock as a favorable option.
Qantas Airways Limited (ASX:QAN) has demonstrated a remarkable recovery from the challenges posed by the COVID-19 pandemic, which threatened the company's existence in 2020. The recent Annual General Meeting (AGM) showcased a trading update and revised guidance for FY25, which elicited a positive response from the market, propelling QAN shares to an all-time high.
The trading update highlighted that first-half FY25 conditions are aligning with expectations. Both Qantas and Jetstar have experienced stable demand across their operations, indicating a strong recovery in the travel sector. Jetstar's domestic unit revenue has outperformed prior expectations, bolstered by higher-than-anticipated travel demand. Additionally, Qantas' domestic load factors and corporate travel demand continue to improve year-on-year.
Financial projections include a 3-5% increase in Group Domestic Revenue per Available Seat Kilometre (RASK) for the first half of FY25. However, the Group International RASK is expected to decline by 7-10% during the same period. The loyalty program is also performing well, with expectations of a 10% increase in underlying EBIT for FY25.
Despite volatility in fuel prices due to geopolitical factors, Qantas is well-hedged, anticipating first-half fuel costs of approximately $2.55 billion. Furthermore, a "thank you payment" totaling $28 million will be distributed to around 27,000 employees, further promoting workplace morale.
Broker sentiment towards QAN remains largely positive, with many firms rating the stock favorably. Analysts have noted strong trends in domestic travel and potential benefits from disciplined cost management. As brokers update their analyses, expectations for QAN's future performance remain optimistic, solidifying its position as a noteworthy player in the airline industry.
