Qantas shares are up today; heres why

• The share price of Qantas Airways Limited was spotted trading 6.828% higher at AU$4.850 per share on ASX at 3:37 PM AEST today.
• The ASX 200 opened higher today and was up 0.72% at 7,048.20 points at 4:02 PM AEST.
• The airline has reported its third straight Statutory Loss Before Tax exceeding AU$1 billion

Today, the share price of Australian airline carrier Qantas Airways Limited (ASX: QAN) traded in green after the company released its FY22 results. At 3:37 PM AEST, the company's shares were spotted trading 6.828% higher at AU$4.850 per share on ASX.

This rise in the company's share price could be due to the overall sound performance of the broader market as the benchmark index ASX 200 opened higher today and was up 0.72% at 7,048.20 points at 4:02 PM AEST.

How did the pandemic impact the aviation industry?

Before we get into the details about the company's financial results, it is essential to note that the travel industry, mainly the airways, has been hit hard after the Coronavirus pandemic struck the world, resulting in lockdowns and thus travel restrictions. As people were required to stay indoors to stop the spread of the disease, the cross-border movement of the people declined drastically.

The airline has reported its third straight Statutory Loss Before Tax exceeding AU$1 billion, reflecting the Delta, Omicron impacts and upfront costs from resuming the airline as lockdowns finally ended.

The reopening of borders witnessed a drastic surge in forwarding travel demand, resulting in a considerable improvement in the balance sheet.

Qantas' net debt dropped from over AU$6.4 billion to AU$3.9 billion at the end of FY22.

While the initial three quarters of the year witnessed border closures, the fourth quarter saw the peak constant levels of travel demand since the onset of the pandemic, said the announcement.

Details from the company’s FY22 results are:

• Underlying Loss Before Tax: AU$(1.86) billion.
• Statutory Loss Before Tax: AU$(1.19) billion.
• Underlying EBITDA: AU$281 million following an AU$526 million EBITDA performance in the second half.
• Positive statutory operating cash flow: AU$2.67 billion.
• Recovery strategy on path for conclusion, with AU$1 billion in savings in FY23.
• Net debt dropped to AU$3.94 billion, below the target range.
• The Company invested over AU$400 million in customer loyalty & experience, new lounges, as well as new routes.
• Declared On-market share buy-back of up to AU$400 million.
• Substantial improvement in operational performance; key measures likely to be mostly back to pre-COVID levels in September this year.
• The record performance of Qantas Freight offset hefty losses by the Group’s international passenger business.
• Total liquidity as of 30 June 2022 was AU$4.6 billion, including AU$3.3 billion in cash.
• The Group expects its FY23 Loyalty Underlying EBIT to increase to AU$425-450 million. 

Bottom Line:

Airlines worldwide are constrained by aircraft and labor availability in returning to pre-COVID levels

despite high demand levels. The company, however, believes that the situation is temporary and the strong yields across its international flying are offsetting the significant rise in the cost of jet fuel.

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