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Why the Qantas Airways Limited share price is at a 9-year high

Short haul flyer Regional Express Holdings Ltd (ASX: REX) has joined Air New Zealand (AIR NZ FPO NZX) (ASX: AIZ) in upgrading its full year profit guidance today in a good day for airline investors.

The doubly good news has rubbed off on the Flying Kangaroo too with Qantas Airways Limited (ASX: QAN) shares skipping to a 9-year high of $5.09 today as several macro factors combine to support local airline stocks.

Falling oil prices have slashed airlines’ fuel bills across the board and this looks a structural change that financial markets  are waking up to, while a weaker Australian dollar over the last 24 months has also encouraged inbound and domestic tourism.

Qantas’s chief executive has also been busy slashing staff costs with a savage redundancy program, which means the airline is expecting underlying profit before tax between $1.35 billion to $1.4 billion for FY 2017.

This would make the last two financial years the two best for profits in the 100-year history of Qantas, as its domestic business continues to outperform the more price-competitive international sector.

Elsewhere on the S&P/ASX 200 (Index: ^AJXO) (ASX: XJO) travel stocks enjoyed a good day with Webjet Limited (ASX: WEB) closing 2.3% higher at $12.32, Flight Centre Travel Group Ltd (ASX: FLT) lifting 2.6% to $26.70, and Corporate Travel Management Ltd (ASX: CTD) rising 2.7% to $22.63.

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Motley Fool contributor Tom Richardson owns shares of Corporate Travel Management Limited and Webjet Ltd.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia owns shares of Corporate Travel Management Limited and Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.