Qantas Shares Surge 1.6% To Record High As Airline Raises Domestic Revenue Forecast, Restarts Dividends

Qantas Airways saw its shares jump to a record high after the airline raised its domestic revenue expectations and announced plans to restart dividend payments.

The upgrade, driven by stronger-than-expected travel demand and lower fuel costs, is a key milestone in restoring trust under the leadership of the new CEO and chair Vanessa Hudson.

The flag carrier's new Chair John Mullen said Qantas' turbulent 18-month period, marked by legal and regulatory hurdles and customer dissatisfaction, was well over and the company was learning from its past mistakes, Reuters reported.

Following a drop in global fuel prices, its first-half jet fuel costs fell to AU$2.55 billion from AU$2.7 billion, and the share price surged 1.6% to a record AU$8.04.

The domestic income per available seat kilometer for Qantas was now anticipated to surpass its initial projection of 2-4%. This update comes after fuel prices fell globally.

Qantas predicts a 7-10% decline in international revenue per seat kilometer amid heightened competition. However, Qantas' first-half performance is in line with expectations, according to CEO Hudson.

Qantas now expects greater profits given strong domestic growth and lower fuel prices. Furthermore, its quick global expansion is also likely to boost its capacity by 10%.

Qantas is nearing completion of its AU$400 million share buyback, which will likely boost its confidence despite potential fuel cost increases due to global tensions.

"Jetstar saw stronger than anticipated demand, while Qantas Domestic load factors and demand for corporate travel continues to improve year on year," Hudson said in a speech in Qantas' annual general meeting.

The airline's leadership also showed no objections about Qatar Airways acquiring a 25% stake in Virgin Australia, emphasizing that its carefully considered investment plan makes it resistant to market downturns.