Qantas Airways Ltd

L1 Capital Long Short Fund has updated its investment thesis on Qantas Airways Ltd, maintaining its position despite a recent decline in the share price. The Fund continues to hold Qantas because it believes the company has emerged from the pandemic in a stronger competitive position, supported by a $1 billion cost reduction program, an improved market share, and enduring demand for both business and leisure travel. While the share price was impacted over the quarter by investor concerns around a potential economic slowdown and elevated jet fuel costs, Qantas reaffirmed its second-half EBITDA guidance and outlined strategic responses to manage these challenges. These include selectively passing through some cost increases to travellers and slightly reducing domestic capacity over the coming year. L1 Capital Long Short Fund continues to view Qantas as one of the world’s highest quality airlines, underpinned by its industry-leading position, a high-margin and fast-growing loyalty business, and a capable, experienced management team.

L1 Capital Long Short Fund continues to hold Qantas due to its strong performance and positive outlook. The airline’s shares rose after reporting results at the top end of its guidance and reaffirming its FY24 financial targets. Qantas has successfully reduced its net debt and announced a $400m share buyback, further enhancing shareholder value. The recovery in travel continues, with leisure demand exceeding pre-COVID levels and corporate/SME demand approaching pre-pandemic figures. Despite operational challenges this year, including call centre issues and flight disruptions, there are signs of material improvements, which L1 Capital expects to resolve gradually. The fund believes Qantas has emerged from the pandemic in an even stronger position, thanks to its $1b cost-out program, improved market position, and significant pent-up demand for both leisure and business travel. If Qantas meets its FY24 targets, the potential for close to $1 in earnings per share, combined with the company’s low P/E ratio, indicates more than 100% upside. L1 Capital sees significant upside potential through earnings growth and a P/E re-rating, particularly as the company’s earnings mix shifts toward more stable domestic earnings and its loyalty business.

L1 Capital Long Short Fund has reaffirmed its investment thesis in Qantas Airways Ltd, following a strong quarterly performance that saw the airline deliver results at the top end of its guidance and reaffirm its FY24 financial targets. The Fund continues to hold its position, highlighting Qantas’ significant reduction in net debt and the announcement of a ~$400 million share buyback as key positives. L1 Capital Long Short Fund notes that travel demand continues to recover, with leisure travel exceeding pre-COVID levels by 25% and corporate travel nearing full recovery. While Qantas has faced operational challenges—common across the global aviation industry—the Fund observes that material improvements are emerging across customer service, flight reliability, and baggage handling. L1 Capital Long Short Fund believes Qantas has emerged from the pandemic in a stronger position, supported by a $1 billion cost-out program, enhanced market share, and sustained travel demand. Should Qantas meet its FY24 earnings targets, the Fund sees potential for significant earnings growth and valuation re-rating, particularly as the company’s earnings base shifts toward its more resilient domestic and loyalty businesses.

L1 Capital Long Short Fund continues to hold Qantas Airways due to its impressive performance and strong outlook. Following a trading update, Qantas raised its first-half profit before tax guidance to $1.2b – $1.3b, exceeding market expectations by over 150%. This growth is attributed to strong domestic travel demand and effective yield management. Additionally, Qantas has successfully reduced its net debt, positioning itself with ample capacity for further capital management. L1 Capital views Qantas as emerging from the pandemic in a stronger position, with a $1 billion cost-out program and a robust market position. The fund anticipates continued strong demand for leisure and business travel, despite broader economic challenges. With potential earnings per share of close to $1 in FY24 and a low P/E multiple, L1 Capital sees significant upside in Qantas shares through both earnings growth and a P/E re-rating as the company’s earnings mix shifts toward more stable domestic and loyalty-based revenue streams.

L1 Capital Long Short Fund continues to hold Qantas Airways following a strong performance, with the company providing its second earnings upgrade in just six weeks. Qantas raised its first-half profit before tax expectations by $150 million and plans to reduce net debt by $900 million by December 2022. The company is also exploring additional shareholder returns given its low debt levels. L1 Capital views Qantas as having emerged from the pandemic even stronger, with a $1 billion cost-out program and an enhanced market position. The continued demand for leisure travel, despite macroeconomic challenges, supports Qantas’s strong outlook. The fund sees significant share price upside, driven by earnings growth and a potential P/E re-rating, as Qantas’s earnings mix shifts toward more stable domestic earnings and its loyalty business.

L1 Capital Long Short Fund continues to hold Qantas Airways Ltd following a strong rally in the company's shares, driven by upgraded profit expectations for the first half of FY23. The upgrades were fueled by robust domestic and international travel demand, alongside exceptional yield management. Qantas also highlighted its significant debt reduction plans, targeting a reduction of $900m by December 2022. L1 Capital views Qantas as having emerged from the pandemic in a stronger position, driven by a $1b cost-out program, improved market share, and strong pent-up demand for leisure travel. Despite macroeconomic headwinds, the company’s earnings mix is expected to shift towards more predictable domestic and loyalty business, offering potential for sustained growth. Given Qantas' low P/E ratio, L1 Capital believes there is considerable upside potential through both earnings growth and a P/E re-rating as the company continues its recovery and capital management initiatives.

L1 Capital Long Short Fund continues to hold its position in Qantas Airways Ltd (Long +6%) as the airline's shares recovered, supported by robust domestic demand despite higher airfares. The Fund remains confident in Qantas' competitive positioning, backed by its $1b cost-out program, exceptional loyalty program, and dominant position in the Australian domestic market. Qantas is expected to improve its Loyalty offering, enhancing access for Frequent Flyer members to use points, which should positively impact both customer and investor sentiment. The Fund also sees strong medium-term prospects driven by Qantas’ market-leading loyalty business, which is expected to double earnings over the next 5-7 years. Additionally, the company is set to benefit from a fleet of new, more fuel-efficient aircraft, Project Sunrise (enabling direct flights to London and New York), and sufficient balance sheet capacity to repurchase shares and recommence fully franked dividends in the near future. With a P/E of just 6x, Qantas remains undervalued by the market, particularly considering its strategic advantages, exposure to growing inbound Asian tourism, and the high-growth potential of its capital-light loyalty division.

L1 Capital Long Short Fund continues to hold its position in Qantas Airways Ltd. (Long +8%) following a strong rally in shares, driven by the company’s updated plans to enhance its Loyalty program. While the impact on earnings was less than market expectations, the Fund sees significant long-term benefits from Qantas's strategy to improve access for Frequent Flyer members. The Fund remains confident in Qantas’s outlook, given its market-leading loyalty business, which is expected to double earnings over the next 5-7 years. Additionally, the company’s fleet of new, more fuel-efficient aircraft and the upcoming Project Sunrise, which will offer direct flights between Melbourne/Sydney and London/New York, position it well for continued growth. Qantas also has ample balance sheet capacity to repurchase shares and resume fully franked dividends. With the new CEO, Vanessa Hudson, addressing customer pain points and improving sentiment, L1 Capital views the company as undervalued at a FY25 P/E of only 6x, particularly given its dominant position, exposure to strong tourism tailwinds, and high-growth loyalty division.

L1 Capital Long Short Fund continues to hold its position in Qantas Airways (Long +11%) following a solid quarter, where the company outlined plans to enhance its Loyalty program by providing easier access for Frequent Flyer members to redeem points. This update had a smaller-than-expected impact on earnings, but it highlighted significant medium-term benefits from investing in the program. L1 Capital remains optimistic about Qantas' prospects over the next few years, especially given its dominant position in Australia’s loyalty business, which is expected to double earnings over the next 5-7 years. The company is also set to receive new, more fuel-efficient aircraft and launch Project Sunrise, enabling direct flights from Melbourne/Sydney to London and New York by 2026. With strong balance sheet capacity, Qantas is positioned to continue share buybacks and recommence fully franked dividends next year. The new CEO, Vanessa Hudson, is focused on addressing customer pain points, which should bolster both customer sentiment and investor confidence. Despite a dominant industry position, strong growth prospects, and a highly valuable loyalty division, Qantas currently trades at a relatively low FY25 P/E of around 6.3x, which L1 Capital views as underappreciated by the market.

L1 Capital Long Short Fund continues to hold Qantas Airways Ltd, as the company has shown strong share price performance and remains well-positioned for medium-term growth. With Australia’s best loyalty business, which is expected to double earnings over the next 5-7 years, Qantas is benefiting from new, more fuel-efficient aircraft deliveries and the upcoming Project Sunrise, enabling direct flights to London and New York by 2026. Additionally, Qantas has significant balance sheet capacity, allowing for share buybacks and the potential resumption of fully franked dividends next year. CEO Vanessa Hudson is effectively addressing customer pain points, which is expected to improve both customer sentiment and investor confidence. Despite these strong fundamentals, Qantas trades on an FY25 P/E of only around 6x, with its high-growth, capital-light loyalty division underappreciated by the market. L1 Capital believes Qantas’s leading industry position and future growth prospects make it an attractive investment opportunity, especially at current valuations.

L1 Capital Long Short Fund continues to hold its position in Qantas Airways, following the company’s strong FY24 results, which were broadly in line with expectations. The performance was driven by solid trading across both Qantas and Jetstar, with strong cash flow supporting a new $400 million share buyback and guidance for reinstating fully franked dividends from 1H25. Domestic travel demand remains robust, and the recent drop in jet fuel prices adds an extra boost to earnings. Under the leadership of new CEO Vanessa Hudson, Qantas has made notable strides in improving customer satisfaction, as evidenced by enhanced on-time performance, better Net Promoter Scores, and higher frequent flyer participation. L1 Capital views Qantas as well-positioned for continued growth, especially given its leading loyalty business, which is expected to double earnings over the next 5-7 years. The company is also expanding its fleet with more fuel-efficient aircraft, and Project Sunrise, set to offer direct flights from Melbourne/Sydney to London and New York from 2026, is a major positive. Despite its leading position in the industry, Qantas trades at a FY25 P/E of just 7.5x, reflecting significant undervaluation in the market.

L1 Capital Long Short Fund continues to hold its position in Qantas Airways, which has seen a 9% increase in share price. The company's AGM update highlighted a positive operating environment, with strong travel demand, especially in the corporate segment, and the benefit of lower fuel prices. Qantas also upgraded its expectations for domestic yields, while its international segment remains stable and its loyalty business continues on track for double-digit earnings growth. These factors support the company’s plan for robust shareholder returns, including a return to fully franked dividends from H1 2025. L1 Capital remains confident in Qantas’ medium-term outlook, given its strong position in Australia’s loyalty market, expected to double earnings over the next 5-7 years. Additionally, the company’s fleet of new, more fuel-efficient aircraft and the upcoming Project Sunrise, enabling direct flights from Melbourne/Sydney to London and New York from 2026, strengthens its competitive advantage. Despite these positive fundamentals, Qantas trades on a relatively low FY25 P/E of 7.5x, suggesting significant underappreciation by the market.

L1 Capital Long Short Fund continues to hold its position in Qantas Airways following a strong 80% rally in the stock since October, driven by favourable trading conditions and improved business performance. The airline has benefitted from strong domestic yields, robust travel demand, and a reduction in customer pain points, supported by management and board changes. Lower fuel prices have further boosted its earnings outlook, and the company is on track to return to fully franked dividends from H1 2025. Qantas' loyalty business remains a key growth driver, with expected double-digit earnings growth over the next 5-7 years. Additionally, the delivery of new, fuel-efficient aircraft and the Project Sunrise initiative, which will enable direct flights to London and New York by 2026, position Qantas well for future growth. Despite the strong rally, Qantas trades on a FY25 P/E of just 8.3x, which L1 Capital believes does not fully reflect the company’s market leadership, growth potential, and the strength of its loyalty division.

L1 Capital Long Short Fund has updated its investment thesis on Qantas Airways Ltd, maintaining its position following continued share price strength and supportive trading conditions. The fund continues to hold because it sees sustained earnings momentum and structural growth drivers that remain underappreciated by the market. Qantas has benefited from strong domestic travel demand, improving corporate travel, and lower fuel prices, leading to upgraded yield expectations and ongoing performance in its Loyalty division, which is tracking toward double-digit earnings growth. L1 Capital Long Short Fund also highlights management and board changes, improved customer sentiment, and the company’s strong execution as factors reinforcing investor confidence. Looking ahead, Qantas is expected to benefit from a pipeline of new, fuel-efficient aircraft and the rollout of Project Sunrise, which will enable direct long-haul flights from Australia to key global destinations. The fund notes that despite a significant rally since October 2023, Qantas still trades on an FY25 P/E of just 8.6x—a level that, in their view, does not fully capture the company’s leadership in the domestic market, the structural growth of its capital-light Loyalty business, and broader medium-term travel demand tailwinds.

Alpha Plus has updated its investment thesis on Qantas Airways Ltd (QAN), continuing to hold the position despite its strong performance over the past six months. The fund manager believes Qantas is entering a favourable phase, supported by a resilient domestic market structure and robust customer demand. Recent trading data has reinforced this view, and Alpha Plus also notes the potential for capital returns as a further positive. Additionally, the company’s valuation remains attractive in their eyes, particularly given the discount at which Qantas trades relative to its global airline peers. These factors underpin Alpha Plus’s constructive outlook on the stock.