LOGIN
FREE REPORT
REQUEST WALKTHROUGH
search
times
New call-to-action

Tags

See all

Articles

QAN

Qantas Airways Limited Announces Further Flight Reductions And Job Cuts

Max Molinari

Max is an Equity Analyst with ASR Wealth Advisers. He has studied a Bachelor of Business and a Bachelor of Laws at the University of Technology, Sydney. Max currently holds RG146 qualifications.

Qantas Airways Limited (ASX: QAN) has announced that its flagship airline Qantas, and its low-cost alternative Jetstar, will suspend international flights from late March and reduce domestic flight by 60%. Furthermore, two-thirds of employees will be stood down until at least end of May and dividend announced in 1H20 will be deferred until Sept 20.

QUANTAS 1

The airline industry continues to be impacted by Covid-19, however this announcement was largely expected given previously flagged 90% reduction in international flying and 60% in domestic. The impact of Covid-19 is expected to be significant in the near-term for the whole sector.

The share price reacted negatively in light of the news, plunging over 11% down to $2.26 per share, as at midday.

Some investors believe the stock presents good value at these prices, following the saying “the best house on a bad street” or “the cleanest dirty sheet in the hamper”. It must be considered that the company is one the best positioned in the industry to weather the impact of a complete shutdown of passenger air traffic due to its relatively low debt and dominant home market advantage. The company also has full ownership of its loyalty program, Qantas frequent flyers, which is a significant cash generator for the business, and provides a buffer to the liquidity deficit from the situation.

 


Disclaimer:


This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)
(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).
This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law, we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.
ASR has no position in any of the stocks mentioned.

New call-to-action
New call-to-action

Company Articles

Looking for more Stock Recommendations?

Fill in your details to receive our special report: Top 3 Income Stock Recommendations for 2020.