Short haul flyer Regional Express Holdings Ltd (ASX: REX) has joined Air New Zealand (AIR NZ FPO NZX) (ASX: AIZ) in upgrading its full year profit guidance today in a good day for airline investors.
The doubly good news has rubbed off on the Flying Kangaroo too with Qantas Airways Limited (ASX: QAN) shares skipping to a 9-year high of $5.09 today as several macro factors combine to support local airline stocks.
Falling oil prices have slashed airlines' fuel bills across the board and this looks a structural change that financial markets are waking up to, while a weaker Australian dollar over the last 24 months has also encouraged inbound and domestic tourism.
Qantas's chief executive has also been busy slashing staff costs with a savage redundancy program, which means the airline is expecting underlying profit before tax between $1.35 billion to $1.4 billion for FY 2017.
This would make the last two financial years the two best for profits in the 100-year history of Qantas, as its domestic business continues to outperform the more price-competitive international sector.
Elsewhere on the S&P/ASX 200 (Index: ^AJXO) (ASX: XJO) travel stocks enjoyed a good day with Webjet Limited (ASX: WEB) closing 2.3% higher at $12.32, Flight Centre Travel Group Ltd (ASX: FLT) lifting 2.6% to $26.70, and Corporate Travel Management Ltd (ASX: CTD) rising 2.7% to $22.63.
