Qantas shares at six-month low as business travel slows
Derek Rose |
Qantas shares have fallen to a six-month low after Australia’s largest airline said its revenue would grow at the low end of expectations.
Qantas said while domestic leisure travel was performing strongly, there was less demand for flights from businesses outside of the resource sector than it had anticipated.
“Corporate travel continues to grow, although less than previously forecast,” chief executive Vanessa Hudson told shareholders at Friday’s annual general meeting.
“We are adjusting domestic capacity in the second half to match the demand profile we are seeing.”
Qantas said it expected its domestic revenue to grow by about three per cent in the first half, which is at the lower end of the guidance range of three to five per cent growth provided in August.
Qantas shares dropped 6.6 per cent to $9.51 on the news, their lowest level since early May, leaving them up just 4.6 per cent for the year to date.
The carrier said its forecast for international revenue remained unchanged at two to three per cent growth and its Qantas loyalty program was trading strongly and on track to hit its targets.
The airline offered a first glimpse of its first specially configured plane that will fly Australians non-stop to London and New York in 2027.
The A350-1000ULR was on the Airbus assembly line in Toulouse, France, with its fuselage sections, wings and landing gear now attached, Qantas said.
The aircraft will soon be transferred to a new hangar, where its engines and instruments will be installed for test flights in 2026.
Qantas has ordered a dozen of the planes for “Project Sunrise”, its plan to connect Australia’s east coast with London and New York via non-stop flights for the first time.
The 22-hour flights will cut up to four hours off total travel time compared to one-stop services.
“This is an aircraft that will change what’s possible when it comes to international point-to-point air travel,” Ms Hudson told shareholders.
“Our teams are incredibly excited for the arrival of the first aircraft late next year, a landmark moment, not just for international aviation, not just Qantas, but I think also for Australia.”
Qantas also said on Friday it would introduce a new cabin product on domestic and short-haul flights that will offer passengers extra leg-room, priority boarding and priority access to overhead baggage space.
Qantas Economy Plus will be available for purchase beginning in February, with high-level frequent flyers receiving complimentary access.
Ms Hudson told the meeting Qantas would have Wi-Fi available on all of its international long-haul flights by June 2026.
It will be one of the last major airlines to activate the service on long-haul flights.
“We know that we need to do that as quickly as possible,” Ms Hudson said.
Because of Australia’s geography, the airline needed its partner Viasat to launch a satellite to power its wi-fi service, which it had now done, she said.
AAP
