What Happened to the Qantas Share Price?
Qantas Airways Limited [ASX: QAN] is an Australian based domestic and international airline with two brands, Qantas and Jetstar. It closed 1.11% lower on Friday.
Why Did This Happen to the Qantas Share Price?
On Thursday, Qantas noted it was paying $450 million of unsecured debt back eight months early. The transaction will occur on 20 August 2014. This leaves Qantas with more than $3 billion in cash and undrawn bank lines. The company is focusing on repaying debt. They aim to have 49 mid-life aircraft unencumbered (owned outright) by 2017. Their entire active fleet of planes is around 130.
What Now For Qantas Airways Limited ?
The stock should rally from here. Singapore’s Changi Airport Group announced on Thursday that it will be reducing fees to attract more airlines to use the airport. Changi Airport suffered last year when Qantas tied with Emirates Airline to use Dubai as a stopover to Europe, nicknamed the Kangaroo route.
The changes to Changi Airport could prove to be attractive for Qantas’s budget brand Jetstar.
Qantas has a 65% market share of the Australian domestic market. They also account for 18.7% of passengers travelling in and out of Australia.
Free Reports:
Get Our Free Metatrader 4 Indicators - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter
Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.
Qantas can be a volatile stock. It has traded between $1.82 and 0.96 cents since 2013.
There appears to be support for the share price at 0.96 cents level so I wouldn’t expect the stock to drop below this.
It’s worth noting that Qantas shares have struggled to trade above $1.40 in the past six months. JP Morgan have a price target for Qantas of $1.47, a 20% increase on the previous target of $1.23.
Shae Smith+
Editor, Money Morning
