Qantas Airways Limited (QAN) is the flag carrier of Australia and its largest airline by fleet size, international flights, and international destinations. It is the third oldest airline in the world, after KLM and Avianca. It reports its full-year numbers on the 20th of August.
The travel industry has been decimated by the COVID-19 pandemic as leisure and corporate travel ground to a halt as borders closed around the world. Qantas has grounded 100 of its aircraft for at least a year, slashed 6,000 jobs. It has raised A$1.9bn in equity and as a part of a three-year plan more than a fifth of its workforce will be made redundant and furlough a further 15,000 employees.
Rating agency Moody’s downgraded Qantas’s rating to Baa2 with a negative outlook but said the recent equity raising would strengthen Qantas’s balance sheet and improve its financial flexibility. It added that Qantas was better placed than most airlines, as Australia’s domestic aviation market was one of the most profitable in the world per capita.
Ahead of the full-year result, Qantas has managed expectations by guiding the market to a small underlying profit of approximately $25million for the full year, a sharp drop from the $912 million the year before. It would come as a surprise if Qantas were to announce a final dividend.
Technically, the decline from the all-time high share price of $7.46 in December last year to the March $2.03 low demonstrates impulsive characteristics. Following this sell-off dips have been well supported ahead of $3.00. Providing this support level holds the correction can continue higher, towards trend channel resistance and the May high $4.80. More so on a break of downtrend resistance at $3.90/00 from the February $6.83 high.
Conversely, should the share price fall below $3.00 a retest of the March $2.03 low is possible.
Source Tradingview. The figures stated areas of the 13th of August 2020. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation
From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.