Qantas Airways shares (ASX:QAN) added 5.64% to hit a new all-time high of A$11.63 today, propelled by positive momentum from U.S. airline stocks and robust domestic financial results. The airline’s performance mirrors a broader uptrend in the aviation sector, fueled by improved pricing power and reduced competition.
Qantas has significantly outperformed the broader market, exceeding the ASX All Ordinaries Index by 13.11% over the past six months and the ASX 200 by an impressive 71.69% over the past year.
Qantas reported an 11% increase in underlying profit before tax, reaching A$1.39 billion for the half-year ending December 31, 2024. This financial strength was attributed to strong travel demand and strategic fleet investments. The company also resumed shareholder dividend payouts for the first time since 2019, distributing an interim dividend of 16.5 Australian cents per share and a special dividend of 9.9 cents per share.
Analysts at Jefferies recently raised their price target for Qantas to A$10.53 from A$7.98, citing strong domestic and international demand, coupled with the resumption of dividend payments. They noted that lower fuel prices have enabled the airline to offer more discounts and invest in customer service enhancements.
The U.S. airline industry is also contributing to the positive sentiment. Major U.S. carriers experienced substantial share price increases following favourable airfare data for July, signalling a recovery in pricing power. Legacy carriers like United Airlines, American Airlines, and Delta Air Lines saw their shares jump between 8% and 10%, while budget airline Southwest Airlines also enjoyed gains.
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Conversely, Spirit Airlines, a U.S. budget carrier, has expressed “substantial doubt” about its ability to continue operating independently. This comes shortly after emerging from Chapter 11 bankruptcy. The potential exit of Spirit Airlines could reduce competition in the U.S. market, potentially benefiting other airlines through increased pricing power and market share.
Qantas is scheduled to release its next earnings report on August 28, 2025 (preliminary), followed by the annual report on September 11, 2025. Analyst consensus estimates forecast earnings per share (EPS) of A$1.08 for the next financial year, placing the forward price-to-earnings (PE) ratio at 10.00, compared to the current PE ratio of 13.52. The current dividend yield is 3.03%, with a dividend of A$0.33 per share.
With Qantas shares enjoying a mighty year, up 93.99% in 12 months, expectations are elevated into earnings. Price discovery up at these new heights continues apace, and volatility can be expected when technicals have little to guide them as far as support/resistance levels.
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