A fund manager has outlined why he has been buying up ASX airline Qantas Airways Limited (ASX: QAN) shares.
Qantas shares are lifting 1.72% today. For perspective, the S&P/ASX 200 Index (ASX: XJO) is 0.1% in the green today.
So what does this fundie have to say about Qantas?
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COVID recovery
Qantas shares may benefit from the COVID-19 travel recovery, according to this portfolio manager.
Stuart Welch, portfolio manager at Alphinity Investment Management revealed this week his team has bought up Qantas shares.
Explaining this, Welch said:
Despite a more difficult outlook for the consumer, I do think there is a COVID recovery story at play here, which after a few fits and spurts is actually underway.
October travel data, released by the ABS on Tuesday, shows overseas arrivals to Australia surged 13% on the previous month to more than 1.2 million. Overseas departures descended 1.9% to 1.02 million. The ABS noted this data is provisional.
Speaking on the travel recovery, Welch said:
It was led by visiting friends and family, but it has expanded into leisure, business travel and even more recently into the international side.
Back in September 2021, only 18,850 people arrived in Australia while 30,330 left the country. Australia opened its international borders in February this year.
Qantas shares have had a turbulent week amid proposed Federal Government industrial relations reforms.
Qantas is arguing potential changes would "destroy demand" for flying due to higher costs. The airline said:
For the Qantas Group, it will almost certainly mean less flying because costs will rise and demand will be destroyed – particularly on marginal routes. This will result in less investment and fewer jobs in aviation, with a flow on effect for communities and tourism.
Qantas share price snapshot
Qantas shares have surged nearly 18% in the year to date, while they have climbed 5% in a year.
For perspective, the ASX 200 has fallen 3% in the past year.
Qantas has a market capitalisation of about $11.1 billion based on the current share price.
