Despite the chaos of cancellations and disruptions in the travel and tourism sector over the last two years due to COVID, we are starting to see signs that this sector is getting back to business.
This week Qantas Airways (ASX:QAN) Limited announced plans to deliver the world’s longest commercial flights, which would see Australians fly from Sydney to London in just over 19 hours and New York in a similar timeframe. This is certainly better than the 36 hours it now takes most people to travel to London from Sydney.
While we will have to wait three years for these flights to commence, it does show Qantas is bullish on the future of travel, as it has ordered 12 new planes to achieve its goals.
Qantas also announced that it would acquire the remaining 80% stake in ASX listed Australian carrier, Alliance Aviation Services (ASX:AQZ) Ltd.
Alliance has a fleet of 70 aircraft that mainly service the resources industry in WA and Queensland. Qantas has owned 20% of this airline for the last three years and is the company’s main client, as they have a long term agreement that will see Alliance operate several QantasLink services.
While Alliance shareholders are yet to approve the deal and the ACCC will also conduct an investigation before the deal is done, on the surface this acquisition appears to be good for Qantas, as it opens up new routes for the airline while keeping costs down.
Interestingly, Alliance shares have traded down around 15% in the past week but following the announcement on May 5, they shot up over 20%, which is not much above where they were a week ago.
Right now, this deal shows that Qantas is looking to the future and while I don’t normally recommend airlines, I think Qantas might just be about to take off.
Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He is also author of the award-winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good bookstores and online at www.wealthwithin.com.au