South Pac Share and Oil Price Weekly Update

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

    Regional Express (Rex) continues to improve against all other carriers increasing by more than 30% in the last 2 months from AUD1.05 to AUD1.38. This is the highest result the carrier has achieved since Feb-2008. Strong FY17 results are pushing the Rex price upwards as demand for the carrier also increases. Rex reported profit quadrupling in FY2017 and forecasted double digit profit growth for FY2018. Group executive chairman Lim Kim Hai recently stated that “as long as the Australian economy continues this modest recovery, I have confidence that Rex will continue to perform well”.

    Virgin Australia released its 2017 Annual Report last week, highlighting improving underlying performance for FY2017. Virgin Australia chairman Elizabeth Bryan, said the carrier’s FY2018 focus will be on “improving our cost base, building strength in our balance sheet and growing revenue”. The group’s ‘Better Business’ turn around programme is expected to remain ahead of schedule, with improving cash, debt and leverage outcomes to remain a key focus, with further balance sheet improvements expected to be delivered. Virgin Australia is also going to “seize growth opportunities and consolidate our market position”, in particular expanding access to Greater China.

    Qantas has begun its buy back of shares announced during the FY2017 results. The buy back will result in a total consideration payable of AUD373 million. The carrier is also hopeful its proposed JV with oneworld partner American Airlines will be approved, driving sales and market share. Qantas senior executive VP the Americas, New Zealand, Pacific Islands & Japan Stephen Thompson, speaking at CAPA’s 2017 Latin America Aviation Summit, stated: “Right from day one it made a lot of sense”. US authorities rejected the proposed tie-up in late 2016, citing concerns about the combined market share in the US-Australia market. Qantas and American are ensuring they explain all of the consumer benefits of the proposed partnership, Mr Thompson explained.

    Monthly Snapshot:

    11-Aug 18-Aug 25-Aug 01-Sep 08-Sep 15-Sep 22-Sep
    Qantas Airways $5.76 $5.70 $6.02 $5.70 $5.65 $5.82 $5.80
    Virgin Australia $0.20 $0.21 $0.20 $0.19 $0.19 $0.18 $0.19
    Air New Zealand $2.97 $3.11 $3.25 $3.24 $3.15 $2.96 $2.98
    Regional Express $1.05 $1.07 $1.09 $1.22 $1.24 $1.31 $1.38
    Alliance Airways $1.15 $1.15 $1.21 $1.14 $1.20 $1.21 $1.18

    Oil Prices Update: