Shares of Qantas Airways (ASX:QAN) have jumped to a seven year high after an investor briefing on Tuesday. Speaking at the investor meeting in Sydney, Chief Executive Officer Alan Joyce discussed the significant benefits the company was receiving from its cost-cutting program. He also cited low fuel prices and the world’s “most disciplined capacity market” despite the spotty Australian economic performance. Mr. Joyce said that the current aim of Qantas is to restructure its capacity on domestic routes to maximise opportunities while minimising exposure to challenges.
The company’s CEO noted the strong performance of Qantas despite headwinds facing the Australian economy. “We are seeing in the domestic market a patchy economic performance with the transition of this economy and the poor performance in the resource sector but other strengths across other parts of other sectors," he said. However, he went on further to note the significant improvement in company efficiencies, saying "We are now in the most disciplined capacity market of any market around the globe this year so far.”
Qantas has completed one-third of a three project to cut $2 billion in costs across the company. Mr. Joyce noted that the company could potentially save up to $875m from the restructuring of the business. He also said that the company was on track to reduce its debt by $1 billion. Shares of QAN are up 30c, or 9.04 per cent, at $3.62 per share around 2:28pm on Tuesday. QAN has advanced 196.72 per cent in the last 12 months and 50.83 per cent so far this year.
Author: Simon Herrmann
May 12, 2015
Simon is a financial analyst at independent research firm Wise-owl who wants to change the world by disrupting the cliché approach to investment decision making with convergent thinking. Wise-owl’s goal is plain and simple: Find the best opportunities for our members by following a proven methodology and to create long-term value through high-quality advice, innovation, technology and education. We combine industry experience and the agile mentality of a start-up. Wise-owl is the future of stock market investing.