Why is the Qantas share price beating the ASX 200 today?

The airline has faced a plethora of issues lately.

| More on:
A woman is laughing with joy as she pulls her luggage off the conveyor belt at an airport.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

sdf

Key points

  • Qantas is facing troubles at its terminals with respect to baggage handling, amongst other issues 
  • The airline today announced initiatives to overcome the challenges in the short-term 
  • The Qantas share price is up nearly 3% for the past 12 months of trade 

The Qantas Airways Limited (ASX: QAN) share price has held a steady flight path throughout the day and is rangebound at the time of writing.

On last check, shares in the flying Kangaroo are 22 basis points higher on the day at $4.64 on no news.

In broad market moves, the S&P/ASX 200 Hotels Restaurants & Leisure Index (AXHRJD) is up less than 1% on the day. Yearly returns for Qantas are seen below.

TradingView Chart

What's up with the Qantas share price?

Anyone keeping up with Australian news would be familiar with the current issues facing airlines with respect to baggage handling and processing delays.

If you haven't – it's as simple as that. Qantas in particular has been facing substantial delays and an increased rate of mishandled baggage.

The rate of baggages mishandled is now at 0.009%, or 9 in every 1,000 –which, might not seem like much, but when multiplied of hundred's of thousands (perhaps even millions) of baggage items, the numbers start to stack up.

In response to the challenges, Qantas announced today that it will be increasing the waiting times between domestic to international flights by 30 minutes, in order to slow the pace of foot traffic through the airport.

Specifically, those travellers flying Qantas out of Australian airports will only have the option of a 90 minute connection time (60 minutes previously).

The moves are designed to reduce the number of baggage faults and hopefully improve the airline's sluggish operating performance, after it made 1,700 employees redundant back in 2020, by outsourcing its baggage ground handling.

It's thought today's decision will attempt to "[bring] operations back to pre-COVID standards" as CEO Alan Joyce said, as Qantas continues to battle with ongoing staff shortages and worker-union action.

The Qantas share price is up nearly 3% for the past 12 months of trade.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Travel Shares

Woman on a tablet waiting in for her flight in an airport and looking through a window.
Travel Shares

UBS reveals the biggest question facing Qantas shares over the next 12 months

UBS takes a look at the projected flight trajectory of Qantas shares post this week’s Jetstar Asia closure.

Read more »

A pilot stands in an empty passenger cabin smiling with his arms crossed looking excited
Travel Shares

What does Macquarie think Qantas shares are worth?

Let's see if the broker believes the Flying Kangaroo's shares can keep rising.

Read more »

Man sitting in a plane seat works on his laptop.
Travel Shares

3 reasons to sell Qantas shares today

A leading expert foresees headwinds building for Qantas shares.

Read more »

a passenger plane is on the tarmac with passenger shute attached with a view of the surrounding land and sunset in the background.
Travel Shares

Qantas share price lifts off on big Asian news

Qantas shares have surged more than 73% in a year. Here’s why they’re gaining again today.

Read more »

Man sitting in a plane looking through a window and working on a laptop.
Travel Shares

Could Virgin's IPO impact Qantas shares?

The recent IPO announcement could change the Australian aviation landscape. 

Read more »

Smiling woman looking through a plane window.
Travel Shares

Virgin Australia returning to the ASX with $685m IPO

Demand for domestic travel draws the airline back to the stock market.

Read more »

A woman ponders a question as she puts money into a piggy bank with a model plane and suitcase nearby.
Travel Shares

Here's the earnings forecast out to 2029 for Qantas shares

Can the airline generate even stronger earnings? Here’s what experts think.

Read more »

Man sitting in a plane seat works on his laptop.
Travel Shares

Qantas shares have doubled in less than 2 years. Are they a buy, hold or sell?

What do analysts think of the Flying Kangaroo?

Read more »