Why the Qantas (ASX:QAN) share price is soaring today

The Qantas Airways Limited (ASX:QAN) share price is soaring on Thursday after the government announced a major tourism stimulus package…

| More on:
view from below of jet plane flying above city buildings representing corporate travel share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Qantas Airways Limited (ASX: QAN) share price is soaring on Thursday morning.

At the time of writing, the airline operator's shares are up 4% to $5.38.

Why is the Qantas share price soaring?

Investors have been buying Qantas shares today after the Federal Government announced a major $1.2 billion stimulus package to support the Australian tourism sector.

The package will see the government halve the price of almost 800,000 airline tickets in an attempt to get more Australians to spend on domestic holidays.

The Qantas response

This news has gone down well with Qantas' CEO Alan Joyce, who believes this is the perfect time to launch the stimulus.

In response to the news, he said: "This support is fantastic news for aviation and for the thousands of businesses, big and small, that rely on the tourism industry. With the vaccine rollout now giving more certainty that state borders will stay open, this is the perfect time to provide stimulus and get people travelling domestically again, particularly given there won't be any international tourists for another seven months."

"In total, this package is a lifeline for broader travel and tourism sector in Australia, just as it's trying to get back on its feet. Ultimately, it's an investment in an industry that has always been a huge driver of economic activity and will be again," added Mr Joyce.

What's next?

The company notes that the stimulus program will support the company's plan to increase its capacity from 60% currently to 80% in the fourth quarter. In fact, depending on take-up, the stimulus could accelerate its capacity increase.

Over the coming weeks, Qantas will be working with the Federal Government to support the rollout of the stimulus program. Special Qantas and Jetstar fares will be available online from 1 April 2021 for travel from 1 May 2021.

At this point, Qantas intends to offer up to 32,000 fares per week discounted by 50% of median prices to key regional destinations such as Far North Queensland, Launceston, and Alice Springs. This will equate to a total of ~550,000 fares over the life of the program.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

Top ten gold trophy.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors endured a sour end to the trading week today.

Read more »

A young woman holding her phone smiles broadly and looks excited, after receiving good news.
Share Gainers

Why Boral, FBR, Origin, and Regis Resources shares are pushing higher today

These ASX shares are ending the week positively. But why?

Read more »

A woman is excited as she reads the latest rumour on her phone.
Share Gainers

Why Computershare, Core Lithium, Northern Star, and Vulcan Energy shares are storming higher

These ASX shares are avoiding the market weakness. But why?

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Materials Shares

How has the Liontown share price rocketed 15% in a week?

There's one factor that might explain Liontown's explosive performance of late.

Read more »

a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.
Share Gainers

Why EOS, Novonix, St Barbara, and Whitehaven Coal shares are storming higher

These ASX shares are having strong sessions. But why?

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a strong showing from ASX shares this Tuesday.

Read more »

two people celebrating good news, stock rise, price increase, positive announcement
Share Gainers

Why Ansell, Elders, Predictive Discovery, and Rio Tinto shares are storming higher

These ASX shares are having a strong session. But why?

Read more »

Ten smiling business people wave to the camera after receiving some winning company news.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX's trading week was off to an encouraging start this Monday.

Read more »