On Citi’s estimates, Australia’s flight cancellation price was 5.8 per cent in June and 38 per cent of flights have been delayed. However Qantas was above common at 8.1 per cent and had 46 per cent of flights delayed.

To be honest, the turmoil shouldn’t be confined to Australia, it’s a global scourge. That stated, Citi notes that in June, solely 2.2 per cent of flights by US carriers have been cancelled, and the delay price was about 22 per cent.

Seow has taken a knife to his earlier estimates on Qantas’ underlying pre-tax revenue for monetary 12 months 2023 – chopping it from $740 million to $514 million. On the again of this, he has lowered Citi’s goal share value for Qantas by greater than 20 per cent to $4.28 and positioned a promote advice on the inventory. In doing so, Seow managed to knock a little bit of the gloss from Qantas’ share value. It fell by 0.3 per cent in opposition to the broader market that was up.

This represents a major divergence from the dealer pack – just one different analyst has a promote on Qantas and the bulk have a purchase advice. The consensus for Qantas’ 2023 earnings sits at about $837 million.

In three weeks, Qantas will report its 2022 monetary 12 months outcomes and its chief govt (hopefully) will present some readability on how the airline is faring financially because the begin of the 2023 monetary 12 months in July. We’ll then get a greater image of whether or not Seow is sitting too far out on a limb or whether or not the remainder of the pack has been unduly optimistic.

Citi is broadly supportive of the constructive longer-term tendencies for Qantas and sees a robust revenue bounce within the 2024 monetary 12 months – greater than the airline made within the final full 12 months earlier than COVID-19 annihilated its efficiency.

However Seow is clearly questioning the size of the COVID tail’s impacts on Qantas’ revenue efficiency.

“In abstract Qantas costs a premium for tickets, so we count on efficiency can be a key precedence. Nonetheless, doing so economically seems to be troublesome.”

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