Wirraway
30th Sep 2002, 06:52
AAP
Qantas shares plummet
September 30, 2002
SHARES in Qantas Airways Ltd have plunged to their lowest point in almost a year, amid ongoing war jitters and dark investor sentiment.
Qantas shares were four per cent weaker, or down 15 cents at $3.55 at 1349 AEST.
The stock has fallen for eight of the past nine days amid fears a US war against Iraq could send the price of oil - one of Qantas' biggest costs - soaring.
Any war is also likely to hit one of Qantas' biggest sources of income - international travel, which has struggled to recover following the September 11 terrorist attacks a year ago.
"If there is a war with Iraq, while the company is fairly well-hedged on fuel prices, you would expect to see a fall in international travel and that would have a fairly significant impact on Qantas' revenues," Shaw Stockbroking research director Scott Marshall said.
Qantas was believed to be well-hedged against any soaring oil price until June next year, Mr Marshall said.
"At this stage I dont see that (the price of oil) as a threat, but when you are talking about a war in the Middle East, that is very hard to predict."
Another factor weighing on Qantas was the threat of further competition in the domestic market, he said.
On September 16, the Federal Government announced Indonesian airlines would be allowed to fly into international regional airports, such as Cairns, under new air service arrangements.
The announcement was part of the government's plan to grant "unlimited capacity to all foreign airlines" to operate to international airports across Australia.
Mr Marshall said Qantas' share price had been weak since the announcement.
"The Federal Government has allowed Indonesian airlines to operate domestically within Australia, also the government has said they would open up the domestic industry to more international airlines," he said.
"It is just putting a bit of pressure on Qantas from a domestic front, because obviously those airlines would target the higher margin routes.
"Each airline probably won't cause any significant damage, but if you get a number of airlines being able to siphon people off the major routes, it is just another negative for Qantas."
There was also likely to be a little negative sentiment following Qantas' retail offer, which closed on Friday.
Qantas was likely to fall almost $100 million short of the $200 million it hoped to raise in the retail share offer, which was pummeled by the airline's sliding share price.
Qantas offered shares at $4.20 each during the offer - well above what they were worth on the market.
AAP
Qantas shares plummet
September 30, 2002
SHARES in Qantas Airways Ltd have plunged to their lowest point in almost a year, amid ongoing war jitters and dark investor sentiment.
Qantas shares were four per cent weaker, or down 15 cents at $3.55 at 1349 AEST.
The stock has fallen for eight of the past nine days amid fears a US war against Iraq could send the price of oil - one of Qantas' biggest costs - soaring.
Any war is also likely to hit one of Qantas' biggest sources of income - international travel, which has struggled to recover following the September 11 terrorist attacks a year ago.
"If there is a war with Iraq, while the company is fairly well-hedged on fuel prices, you would expect to see a fall in international travel and that would have a fairly significant impact on Qantas' revenues," Shaw Stockbroking research director Scott Marshall said.
Qantas was believed to be well-hedged against any soaring oil price until June next year, Mr Marshall said.
"At this stage I dont see that (the price of oil) as a threat, but when you are talking about a war in the Middle East, that is very hard to predict."
Another factor weighing on Qantas was the threat of further competition in the domestic market, he said.
On September 16, the Federal Government announced Indonesian airlines would be allowed to fly into international regional airports, such as Cairns, under new air service arrangements.
The announcement was part of the government's plan to grant "unlimited capacity to all foreign airlines" to operate to international airports across Australia.
Mr Marshall said Qantas' share price had been weak since the announcement.
"The Federal Government has allowed Indonesian airlines to operate domestically within Australia, also the government has said they would open up the domestic industry to more international airlines," he said.
"It is just putting a bit of pressure on Qantas from a domestic front, because obviously those airlines would target the higher margin routes.
"Each airline probably won't cause any significant damage, but if you get a number of airlines being able to siphon people off the major routes, it is just another negative for Qantas."
There was also likely to be a little negative sentiment following Qantas' retail offer, which closed on Friday.
Qantas was likely to fall almost $100 million short of the $200 million it hoped to raise in the retail share offer, which was pummeled by the airline's sliding share price.
Qantas offered shares at $4.20 each during the offer - well above what they were worth on the market.
AAP