The Qantas Airways Limited (ASX: QAN) share price has risen today as investors reacted to its international capacity news.
The airline was heavily affected by the COVID-19 pandemic, causing huge losses. But now demand is recovering.
Qantas share price rises on recovery
The ASX travel share announced that it’s boosting its international network with extra flights, more aircraft and new routes as it “restores capacity in line with strong travel demand and the broader recovery of the aviation industry.”
From late October 2023, Qantas will add around 1 million seats to its international network over 12 months compared to its current schedule.
The network changes will see the group’s international capacity grow to around 100% of pre-COVID levels by March 2024, up from 44% 12 months ago and 84% today.
Some of the highlights from its update that there will be more flights to key destinations like Tokyo, Los Angeles and New York. The frequency between Australia and Japan will double, with four daily flights to Tokyo.
Two new international routes will launch from Brisbane – Wellington and the Solomon Islands – with E190 aircraft.
Qantas will lease two Airbus A330s from Finnair to meet the demand.
This seems like good news for the Qantas share price with demand remaining strong enough for the business to bring the rest of its capacity online.
CEO comments
The Qantas CEO Alan Joyce said:
The rebound in demand for international travel since borders reopened has been incredibly strong and this boost to our network will add hundreds of thousands of seats in time for the busy Australian summer holiday period.
Qantas has been the most on-time major domestic airline for the past eight months in a row and that improved performance means we can release some of the aircraft we’ve had in reserve. That reflects more parts of the aviation supply chain returning to normal and it’s a huge credit to the hard work of our people across the group.
While airlines globally are working to restore capacity to meet demand, there is still a mismatch between supply and demand for international flying. But with more of our aircraft back in the air, new 787s joining our fleet and our contract with Finnair, we’ve got more seats for our customers and more opportunity for Qantas crew as we increase our own flying.
We know our customers are looking for great value and this additional capacity will also put downward pressure on fares.
Final thoughts on the Qantas share price
I’m not surprised that Qantas shares have gone up 10% over the past six months. It’s making a lot of profit right now thanks to strong demand and rewarding airfare prices.
If I had to build a portfolio of 20 or 30 ASX 200 (ASX: XJO) names to outperform the ASX 200 over the next 12 months, Qantas would be one of the names I’d choose.
