The Qantas turnaround is gaining pace, according to analysts. Deutsche Bank suggests Qantas could return an extra AUD $2.4 billion of cash to shareholders this financial year due to what the Sydney Morning Herald termed an expected record-breaking financial performance “driven by its cost cutting program and the lower oil price”.
Now a Deutsche analyst has told the Herald he expects more could follow and the airline might return 50 cents a share with its half-year results in February and up to another 70 cents a share alongside its full-year results next August.
Just two weeks ago, Qantas took the rare step of officially refuting an editorial in the same newspaper which suggested its recent spectacular financial turnaround might be due to good luck, or to favourable circumstances largely beyond the carrier’s control.
The editorial said a “great deal of luck” had helped Qantas, pointing out that Qantas had enjoyed a AUD 116 million boost from the removal of the carbon tax.
“But above all the profit surged thanks in large part to a halving of the oil price, which cut AUD 461 million straight from the airline’s fuel costs,” the Herald said.
“The price has dropped another 30% since, meaning the next half-yearly result should look stronger still.”
Qantas lost no time in pointing out that the turnaround was due to a lot more than mere luck. See: Qantas hits back against those who call turnaround ‘luck’
Written by Peter Needham