Qantas has revealed foreign investors now owns just under 47 per cent of its shares which is very close to its 49 per cent cap on foreign ownership (Qantas Sale Act). Qantas’ recent impressive financial performance has made it a desirable stock for overseas investors.
Alan Joyce has previously called for the cap to be axed, saying it hinders the airline’s ability to compete for capital and favours airlines like Virgin Australia who are not subject to the cap and is more than 80 per cent foreign owned.
Joyce’s challenge now is to make Qantas’ turnaround sustainable (Finance)
Qantas will post its second-highest annual profit on record next month, estimated to be between $1.35-1.4 billion. These are very impressive results compared to other rival airlines. Virgin Australia, Emirates and Etihad are in fact making losses. Despite increasing international competition analysts expect Qantas’ profit to remain steady at around $1.2 billion per annum in coming years. This has resulted in a 60 per cent jump in Qantas’s share price so far, this year.
To ensure that Qantas’ turnaround is sustainable Alan Joyce is targeting a combination of lower costs and revenue increases. New technology and more modern aircraft (Boeing Dreamliners start arriving in October) are the key to these targets but there will also be changes to its supplier relationships, ground operations and the way aircraft are utilised. Qantas is now targeting further cost reductions of $400 million a year for the next three years to 2020.
Source: Costs, Dreamliners key to Qantas’s smooth flight path by Michael Smith Australian Financial Review July 30th, Qantas nears foreign ownership cap by Jeff Whalley, Herald Sun July 31st.