It's the last day of the financial year but it's anything but a smooth finish for shareholders in Qantas Airways Limited (ASX: QAN), with the share price sinking 5% today after the airline announced to the market a disappointing set of Monthly Traffic and Capacity Statistics.
Of concern for investors was the fall in revenue seat factor which dropped 1.1% to 73.4% year-on-year on the back of a 3% increase in available seat kilometres (group capacity). It reinforces a worrying trend with the carrier also reporting that over the financial year to date capacity was up 1.1% and demand down 1.2%. This resulted in a revenue seat factor of 77.4% or 1.9% lower than the previous corresponding period.
On a more positive note Qantas also announced that during June its highly profitable Qantas Frequent Flyer program reached the milestone of ten million members, with the company singling out (amongst others) its partnership with Woolworths Limited (ASX: WOW).
The fall in Qantas' share price appears to have also pulled down rival Virgin Australia Holdings Ltd (ASX: VAH) with Virgin's stock falling over 2% today against a fall in the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) of 0.4%.
The troubles facing the airline industry don't appear to have deterred investors from the wider travel industry however, with both Flight Centre Travel Group Ltd (ASX: FLT) and Sydney Airport Holdings Ltd (ASX: SYD) gaining around 0.4% today before the books are ruled off.
Beware of airlines
Investor Warren Buffett has often warned investors about the pitfalls of investing in the airline industry; with a tip like that from the world's greatest investor it would certainly seem wise to approach any investment in the sector with extreme care or indeed simply avoid it all together!
In fact, over the past one, five and ten year time frames, shareholders are underwater on an investment in Qantas. With the company currently not even paying a dividend it would seem sensible to look elsewhere for investment opportunities.
