Will Qantas shares jump as it locks in travel dates to Fiji, the UK and the US?
The Qantas (QAN) stock price closed flat after the big announcement but investors should stay tuned for more volatility.
Australia’s largest airline has confirmed it will restart international flights from mid-December, but investor’s expectations should remain subdued, industry experts have revealed.
Why didn't the share price rise?
Despite seemingly good news for investors, shares in Qantas remained subdued, closing at $5.43 for the second day in a row.
RMIT's senior lecturer in finance Dr Angel Zhong believes shares in the company remained stagnant due to today's announcement already being baked into the share price.
"We have seen similar announcements by Qantas recently. In particular, it made this announcement on 26 August about its plans to restart international flights.
"The market has reacted to the original announcement positively and this has been incorporated into the share price already," she told Finder.
However, the finance expert is predicting a slight bump in share price due to investor sentiment changing.
A strong run in the past few weeks has pushed the Qantas share price 11% higher for the year.
Beware of a knee jerk reaction from investors
Investors are also being warned that share price movements in the short term could just be volatility.
AMP's chief economist Shane Oliver explained that the fundamentals of the stock remain the same following today’s announcement.
“It might provide a knee jerk boost – but beyond that, it all depends on governments opening up and permitting the travel and that of course is now vaccine and COVID permitting,” Oliver explained.
“If that doesn’t happen, then the key travel dates are academic!”
Considering buying QAN shares?
While today’s announcement has not materially changed business expectations either way, bullish investors should consider investing through an online share trading platform.
Keep in mind that not all platforms offer the same list of stocks. Some offer US stocks only, so make sure to select a platform that offers ASX-listed stocks.
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What's the latest from Qantas?
According to the national carrier, Aussies who are looking to go abroad will be able to fly from Sydney and Melbourne to London, Vancouver and Singapore first, with the airline resuming flights from 18 December.
On December 19, travellers will also be able to fly to Los Angeles, Tokyo, Hawaii and Fiji.
The airline is now accepting bookings for key travel dates, which aligns with Qantas’s CEO Alan Joyce’s August 26 market update when he delivered the company’s financial results.
As revealed in his August strategy note, Joyce noted that plans to resume travel will depend on governments opening borders, with the Australian government previously announcing an 80% vaccination target rate.
“I know the prospect of flying overseas might feel a long way off – especially with New South Wales and Victoria in lockdown. Some people might say we’re still being too optimistic,” the CEO said.
“But the current pace of the vaccine rollout means all Australian states are on track to reach the 80% target by December – which is the trigger for starting to carefully open to some parts of the world.”
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