Sometimes, no matter how hard you try, life seems to kick you in the guts.
Not long after Qantas (ASX: QAN) announced – with much fanfare – its brand new alliance with Emirates that would see London-bound passengers fly via Dubai, that airport has announced that it will be undertaking urgent maintenance that will see the number of plane movements potentially halve for a three month period.
The Sydney Morning Herald is reporting that the repair work will require 180,000 tonnes of asphalt and is threatening Qantas' 28 weekly landing slots, though the company is apparently 'much closer' to the 28 slots it needs that it was after the original proposal was released.
Reduced schedules are something of a double-edged sword. On one hand, airlines need to have flights scheduled when its customers want to fly, but on the other hand, there will be some bean counters at the Flying Kangaroo that are more than happy with the reduced capacity and the positive impact that will have on the airline's financials – at least in the short term (and assuming it can redeploy the otherwise idle aircraft).
Capacity has been something of a bane for Qantas and domestic competitor Virgin Australia (ASX: VAH) here at home, too. Both airlines are finding it tough to fill the available seats, which, at low prices, can make profitability an elusive adversary.
Foolish takeaway
Over the past 5 years, while the ASX 200 has gone, well, nowhere fast, the two airlines have both seen their share prices fall by over 50%. When it comes to air travel, it seems everyone makes money for investors but the airlines – with the likes of Sydney Airport (ASX: SYD) up 26% and travel agent Flight Centre (ASX: FLT) booking (if you'll excuse the pun) 134% share price gains.
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Motley Fool advisor Scott Phillips doesn't own shares in any company mentioned in this article.
