Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

The HY19 Report Has Grounded The Qantas (ASX:QAN) Share Price

Qantas Airways Limited (ASX:QAN) shares are down 3% after the airline reported its FY19 half year result.

Qantas Airways Limited (ASX: QAN) shares are down 3% after the airline reported its FY19 half year result.

Qantas is Australia’s leading airline. It was founded in the Queensland outback in 1920, the Qantas name was originally Queensland and Northern Territory Aerial Services. The company operates two main airlines – Qantas and Jetstar – and subsidiary businesses including other airlines, businesses in specialist markets such as Q Catering, Qantas Freight Enterprises and the popular Qantas Frequent Flyer program. It employs some 30,000 people with around 93 per cent of them based within Australia.

Here’s What Qantas Reported

Qantas said that revenue grew by 5.8% to $9.2 billion. However, statutory profit fell by 16.3% to $498 million and underlying profit before tax declined 18.7% to $780 million.

Qantas would have been able to report profit growth if it weren’t for the fuel cost rising by $416 million to $2 billion.

The airline said that the domestic business achieved another record profit of $659 million, which was up 1%. Qantas Domestic achieved EBIT growth of 1% to $453 million (click here to learn what EBIT means) with capacity being adjusted. Jetstar also achieved a record result.

Qantas International revenue grew by 7% to $3.7 billion but EBIT declined by 60% to $90 million due to a rapid increase of fuel costs amounting to $219 million that couldn’t be quickly recovered.

Qantas Fleet

Qantas International took delivery of three 787-9s with another six arriving in the first half of FY20 which will take the total to 14. This means the accelerated retirement of 747s, another three will be removed by the end of FY19, leaving seven remaining.

Qantas Dividend and Buy-Back

Not only did Qantas announce a $500 million shareholder return in August 2018, but it has announced another $500 million today consisting of an increase to the interim dividend to 12 cents per share (up 71% from 7 cents) and an on-market buy-back of up to $305 million.

Qantas management comments

Qantas CEO Alan Joyce said: “Across our network, capacity is broadly meeting demand, including sifts to capitalise on the continued strength of the resources sector.”

Is Qantas a buy?

The airline said that group capacity growth is expected to be flat across the domestic and international businesses in the second half.

FY19 fuel costs are expected to be around $3.9 billion, an increased of 21% compared to FY18 with two thirds of it occuring in the first half. However, FY19 transformation benefits are expected to be at least $400 million.

Qantas has made a great recovery over the past five years and I can’t see oil prices rising much higher so Qantas should be able to generate regular profit. But, I don’t think it necessarily be a market beater due to potential competition – its service is somewhat of a commodity. I’d rather go for the ASX shares in the free report below.

[ls_content_block id=”14945″ para=”paragraphs”]

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

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

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.

Skip to content