MENU

Half of Qantas’ Dubai flights in a holding pattern

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.

Interested in our #1 dividend-paying stock? Discover The Motley Fool’s favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of “The Motley Fool’s Top Dividend Stock for 2013-2014.”

More reading

Motley Fool advisor Scott Phillips doesn’t own shares in any company mentioned in this article.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.