Why is the Qantas share price flying higher?
Shares in the national carrier are up 30% over the last 12 months.
Shares in Australia’s biggest airline Qantas (ASX: QAN) have been among the most traded stocks on the ASX on Thursday. At the time of writing, the stock was up nearly 2.9% at $5.01 each.
What is lifting the QAN stock price?
The national carrier on Thursday outlined its full year results and the numbers are not as bad as some had feared.
Qantas posted an underlying loss of $2.35 billion for the 2021 financial year, narrowing from a $2.7 billion loss the previous year. Revenue for the year dropped 58% to $5.93 billion as international and domestic borders remained closed due to COVID-related travel restrictions.
But beyond the headline numbers, there was some positive news.
Qantas said it is preparing to resume international flights to North America, the UK and some Asian destinations from December in a signal that Australia’s rapidly progressing vaccination rate will allow borders to reopen by then.
The airline is also bringing 5 of its A380s back into service from mid-2022 to fly between Sydney and LA, and then from Sydney to London from November.
CEO Alan Joyce said he expects a surge in domestic travel demand and a gradual return of international travel when critical vaccination targets are reached.
Improving finances
Qantas said it has suffered a revenue loss of $16 billion so far, due to the lack of international flying for the full 12 months and extensive disruption to domestic travel.
Despite the massive losses, the airline has managed to reduce its total debt from $6.4 billion to $5.9 billion in June, in part thanks to the axing of around 9,400 jobs and another 8,000-odd employees being stood down.
It had total liquidity of $3.8 billion at June-end, with the airline achieving savings of $650 million in the first year of its restructuring program.
“Despite the uncertainty that’s still in front of us, we’re in a far better position to manage it than this time last year,” Mr Joyce said.
“We’re able to move quickly when borders open and close. We’re a leaner and more efficient organisation. And our requirement for all employees to be vaccinated will create a safer environment for our people and customers,” he said.
That has definitely been reflected in the company’s share price. The Qantas stock is now up more than 30% in the last 12 months.
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