South Pac Share and Oil Price Weekly Update

Each week the Blue Swan Daily brings you a snap shot of the key share and oil prices related to all things travel and aviation.

Qantas:

Qantas shares were down 6.7% on 27-Oct-2017 following the airlines annual general meeting in which it predicted slower growth in H2FY2018 due to tougher domestic competition and higher fuel costs. Shares closed at AUD5.96, the lowest level in a month and down from AUD6.39 before of the announcement.

Qantas Group CEO Alan Joyce stated there were “clear signs” of continued strong financial performance during Q1FY2018, which “showed we’ve made a very positive start to the new financial year”. My Joyce noted total group revenue was up 5% year-on-year for the period, led by strong performance in the domestic market and improvements in the international market, which “has been impacted by capacity growth from our competitors”. Mr Joyce noted that Qantas “flagged that trading conditions are expected to toughen somewhat” in H2FY2018, “mainly due to higher fuel costs and more international capacity growth impacting unit revenue”. The company’s H2FY2018 guidance of higher profit despite a larger fuel bill “shows we are well placed to navigate these conditions, and are on track for another successful year” said Mr Joyce.

Qantas also provided an update on its share buy-back scheme. On 25-Aug-2017, the carrier announced it would buy-back up to AUD373 million (USD287.2 million) of shares. Up to 23-Oct-2017, the company had completed AUD150 million (USD115.5 million) of the buy-back, acquiring 24.9 million shares. The total number of shares on issue after cancellation of shares acquired up to 23-Oct-2017 is 1,783.4 million. This represents an 18.8% reduction in shares on issue since 01-Jul-2015.

Monthly Share Price Snapshot:

29-Sep 6-Oct 13-Oct 20-Oct 27-Oct
Qantas Airways $5.83 $6.13 $6.31 $6.39 $5.96
Virgin Australia $0.19 $0.18 $0.19 $0.19 $0.19
Air New Zealand $3.07 $3.14 $3.16 $3.02 $3.02
Regional Express $1.42 $1.42 $1.51 $1.67 $1.52
Alliance Airways $1.22 $1.29 $1.39 $1.38 $1.44
Source: ASX

Oil Prices Update: