Search ASX code:
Generic filters

Search ASX code:
Generic filters

Search ASX code:
Generic filters

This year. We're going Beyond.

The Qantas (ASX:QAN) share price is on a flight to recovery

The Qantas Airways Limited (ASX: QAN) share price is on a path to recovery as its domestic capacity improves.

Qantas recovery in focus

The airline released an update today which gave insights into how the airline’s domestic operations are going.

Qantas said that there is extremely strong leisure demand right now, helped by the government’s half-price fare offer and the return of the majority of corporate and small to medium business travel.

As a result of the higher demand, Qantas is revising its estimates of reaching 80% of its pre-COVID domestic capacity for the fourth quarter of FY21 and is now expecting this to be above 90% as long as there are no significant border closures. Jetstar is expected to exceed 100% due to strong leisure demand.

All Qantas and Jetstar domestic crew are now back to work.

Is it making profit yet?

No. But its short term strategy continues to be generating positive cashflow rather than returning to pre-COVID profit margins. The impact of this increased activity will be relatively small, according to Qantas. However, low fares will continue to stimulate demand.

But, growth in domestic capacity is expected to continue into FY22, with Jetstar to reach 120% of pre-COVID levels and Qantas to be at 107%.

Qantas is focused on its market position, including network and frequency advantages, which puts the market share at around 70%.

What about the New Zealand bubble?

Qantas is seeing strong demand after the bubble was announced, with tens of thousands of bookings made in the first few days.

Flight bookings for the first few weeks of travel are stronger out of Australia than New Zealand. Qantas is expecting strong demand over the ski season.

Its international lounges in Sydney, Melbourne and Brisbane will open from 19 April 2021, to coincide with the trans-Tasman travel bubble. They have been closed for over a year.

Other international travel

Preparations are still being made for the resumption of international travel, with an expectation of reopenings in October.

Qantas said it has the flexibility to bring forward, push back or stagger the resumption of international flights to align with any government updates.

Summary thoughts

Alan Joyce, the CEO of Qantas, said that it’s important to keep this uptick in perspective. It’s still facing a massive financial loss this year. He said that COVID-19 vaccinations remain key to restarting flights in and out of Australia.

The airline will be one to watch if more international bubbles open up. Qantas can return to making good cashflow if domestic demand returns back to pre-COVID levels.

However, there are other ASX growth shares that may be more likely to generate good profit in FY21 and FY22.

Got $1,000? Try our #1 growth stock...

Rask's top analyst has just identified his #1 'MedTech' stock idea for 2021 and beyond. This is a SERIOUS growth stock.

CLICK HERE to get the ASX stock ticker code, 3,500-word analysis and ASX founder interview!

Our expert investment reports are 100% free.

Simply click here or enter your email below. We'll send you the report.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Got $1,000? Try this...

Rask's top analyst has just identified his #1 'MedTech' stock idea for 2021 and beyond. This is a SERIOUS growth stock.

CLICK HERE to get the ASX stock ticker code, 3,500-word analysis and ASX founder interview!

Our expert investment reports are 100% free.

Simply click here or the button below. We'll email you the report.

At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Keep reading: