Skip to content

CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Qantas share price: where next following latest market update?

We look at the highlights from the airline’s latest market update.

We look at the highlights from the airline’s latest market update. Source: Bloomberg

Latest market update in focus

The Qantas share price (ticker: QAN) surged on Thursday, after the airline said, as part of a new market update, that it expects to be free cash flow positive in the second half of FY21 and that it is on track to book underlying earnings (EBITDA) of between $400 to $450 million for the full-year.

Key point: That EBITDA guidance has been made on the assumption that there will be no further lockdowns or extensive travel restrictions.

Qantas share price: The stock was up 3.65% at the time of writing, to $4.68 per share, off the back of this market announcement.

Background: Airline and travel stocks were some of the worst hit during the height of the pandemic, as a result of significant ambiguity around the breadth and length of the pandemic, and ultimately, its fundamental impact on companies.

While ambiguity remains, particularly around factors such as when full international travel will resume, today’s market announcement from Qantas paints a positive picture of a company in ‘turnaround mode’.

Though it should be noted that the airline still expects to book a after tax loss of approximately $2 billion for the full-year, as a result of redundancies, write-downs and deprecation charges.'

Other things to consider

Overall, the airline said that it has retained a robust liquidity position, with $4.0 billion in total liquidity available, made up of both cash and debt; while also noting that 'Net debt has peaked and starting to decline.' At its height, group net debt stood at $6.4 billion.

Elsewhere, the airline's recovery program has already driven $600 million in cost savings in FY21 and management noted that the program was tracking well to meet previously guided cost reductions of $1 billion by FY23.

Media response: One part of these cost redundancies that have attracted media attention was the reveal of a two year wage freeze. Here the airline noted that the wage freeze would apply to the 'next round of enterprise agreements across the group' and that management would also be subject to the freeze.

More positively, the airline said it was currently on track to hit 95% domestic travel capacity (against pre-COVID levels) in the fourth quarter of FY21. In fiscal 2022, the airline expects its Jetstar and Qantas businesses to hit pre-COVID domestic capacity levels of 120% and 107%, respectively, suggesting high levels of anticipated pent up demand.

Finally and speaking to the dynamic situation, management noted that previous assumptions around the return of substantial levels of international travel had been moderated somewhat, previously thought to be around October but have now been pushed back to December.

CEO comments: ‘We've adjusted our expectations for when international borders will start opening based on the government’s new timeline, but our fundamental assumption remains the same - that once the national vaccine rollout is effectively complete, Australia can and should open up.'

Trade stocks like Qantas long and short with IG today

Create an IG account or log in to your existing account to get started now


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.