Why did Qantas (ASX:QAN) shares soar 4% on Tuesday?

The airline’s results are due Thursday, as the war with Regional Express escalates. But there’s another reason why the stock could be up.
The post Why did Qantas (ASX:QAN) shares soar 4% on Tuesday? appeared first on The Motley Fool Australia. –

asx share price rise represented by red paper plane flying away from other white paper planes

Qantas Airways Limited (ASX: QAN)’s share price shot up 4.36% on Tuesday, as the market awaited its financial results to be revealed on Thursday.

The airline itself didn’t make any announcements to the ASX on Tuesday. 

But investors could have been reacting to rival Regional Express Holdings Ltd (ASX: REX)’s revelation 12 hours earlier. In this release, Rex announced that it was withdrawing from 5 routes that it previously held a monopoly on.

Ever since Rex announced its intentions to compete in the golden Sydney-Melbourne-Brisbane triangle this year, Qantas started flying to regional airports. Previously, these were Rex’s sole domain.

Rex complained to the Australian Competition and Consumer Commission (ACCC) in December, claiming Qantas was indulging in anti-competitive practices.

The smaller airline stated then that the regional routes that Qantas was stamping in to did not have sufficient demand for 2 carriers.

It accused Qantas of “choosing to incur huge losses” on rural routes to “destroy incumbent regional operators”.

On Monday, the cash-bleed became too much to bear. Consequently, Rex announced it would stop flying the following routes, leaving Qantas as the sole provider:

  • Sydney-Bathurst
  • Sydney-Cooma
  • Sydney-Lismore
  • Sydney-Grafton
  • Adelaide-Kangaroo Island

Rex’s share price was down 2.65% on Tuesday, to close at $1.66. It was $1.13 one year ago, just before the coronavirus market crash. 

Another reason why Qantas share price might be spiking

Revenues for the entire aviation industry obviously depends on people being willing to travel again.

Therefore, the rollout of the COVID-19 vaccines in Australia this week could be providing confidence to stock investors that Thursday’s outlook could be very positive.

Earlier this month, The Motley Fool reported that Goldman Sachs had put a $7.05 price target on Qantas. This compares to $5.03 even after Tuesday’s 4.36% jump.

Other ASX-listed companies involved in the travel sector also climbed Tuesday. Corporate Travel Management Ltd (ASX: CTD) was up a whopping 9.82% and Webjet Limited (ASX: WEB) gained 2.79%.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Tony Yoo owns shares of Corporate Travel Management Limited, Qantas Airways Limited, and Webjet Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why did Qantas (ASX:QAN) shares soar 4% on Tuesday? appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!