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Qantas Looks To Take Advantage of Recent Tailwinds, Including Quarantine Free Travel With New Zealand

Sam Waldron

Sam is a freelance writer for equities and markets with Australian Stock Report. He has studied a Bachelor of Commerce at the University of Sydney. Sam currently holds RG146 qualifications.

With Qantas (ASX: QAN) only listing two Sydney-Auckland flights per week, they are prepared to ramp up quickly as Jacinda Ardern announces quarantine free travel between New Zealand and Australia in a fortnights time. She went on to explain that for travel purposes, she would treat Australia as a region of New Zealand, and manage outbreaks that way. Ardern encouraged travel, with a noted warning to prepare for last minute travel disruptions in case of an outbreak.

 

Picture11

Source: Business Traveller

 

Things are looking good for the aviation industry and Qantas is in the best position to capitalise on favourable tailwinds as Australia’s market leader. In fact, it has improved its market share of the domestic market to 74 percent, up from 60 percent from pre-Covid times which mirrors the 14 percent slump Virgin airlines has experienced in this same period, as Virgin owners Bain Capital has pursued a strategy of downsizing its fleet.

 

This market share trend has also played into the budget airline market, with Tiger dropping out of the market, also due to Bain’s strategy, the market has shifted towards Jetstar even further.

 

Qantas as well as its subsidiary Jetstar recorded 130,000 bookings within the first 12 hours of the release of the government subsidised half price fairs to regional locations, with locations including the likes of Whitsundays, Broome and Burnie right across Australia. This higher traffic also spilled onto the non-subsidised routes, with Qantas recording increased bookings from more traditionally popular routes such as Sydney to Melbourne.

 

This shows the pent up demand for travel which is sure to keep up as the economy eases up further and further, and Australia maintains its strong record on mitigating outbreaks.

 

Not only does it dominate international and urban domestic routes, it is starting to find more opportunities in regional routes, with the first Qantas flight touching down in Mount Gambier in South Australia a few weeks ago, marking an end to the 14 year monopoly regional airline REX had over the regional city. This not only provides more flights to regional areas such as Mount Gambier, but the competition drives down prices, allowing for people to put a greater consideration to take a weekend escape to there, or away from there, whereas previously it was not an economically viable option for many families.

 

Qantas is currently trading at $5.22.

 


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.

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