Why is the Qantas Share Price Taking Off?
Key Points
Qantas up 10.06% at the time of writing
Released a market update this morning
Continuing towards Pre covid levels of travel
The Qantas Airways Limited (ASX: QAN) share price took off this Thursday morning.
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Why did the Qantas share price soar?
This morning Qantas released a market update that sent the share price skyrocketing, despite a cautious market over the past week. Qantas announced that they are on target to report a half-year underlying profit before tax of $1.2 to $1.3 billion. Finally, putting the company back into the black after five consecutive halves of losses. Addressing market concerns, Qantas assured, “operation performance has continued towards pre-covid levels”. An additional $200 million investment in continued operational resilience has helped to strengthen the company’s bounce back from the COVID pandemic.
Market reaction & commentary
Demand remains strong across both business and leisure intakes, both well over 100% of pre-covid levels. International market demand is expected to moderate as Qantas, and other carriers increase their capacity. Despite the rapidly rising fuel prices and high inflation, demand for international
travel is expected to improve from 61% of capacity in 1H23 to 77% capacity in 2H23. Similar situation for domestic travel improving from 94% of capacity to 100% of capacity.
The release also detailed that the Qantas loyalty business is expected to post record earnings for the first half. Placing it firmly on track to reach its goal of FY2023 EBIT of $425 to $450 million while simultaneously reducing debt to between $3.4 to $3.2 billion.
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