Refuelled with profits, how ASX 200 favourite Qantas plans to stick the landing on growth

The airline is gearing up to grow its capacity substantially over the coming months.

Key points
  • The Qantas share price has regained much of its COVID-19 losses, but the airline has a way to go before it recovers
  • Fortunately, it's on the right path – and it's running on time 
  • The flying kangaroo is gearing up to surpass pre-COVID Australian flight capacity next quarter and plans to grow its international and domestic capacities by 15% over the coming months

The Qantas Airways Limited (ASX: QAN) share price is in the air on Wednesday amid the company's latest update – and, boy, is it a milestone one.

After returning to profit last half, the national carrier is setting its sights on a COVID recovery in the April quarter. That's when its Australian capacity is expected to finally surpass 2019 levels. And that's just the start.

The Qantas share price is up 1.03% right now, trading at $6.395. That's more than 170% higher than it was when it found itself in the pits of pandemic despair almost three years ago to the day.

For comparison, the S&P/ASX 200 Index (ASX: XJO) is up 0.96% at the time of writing.

Let's take a look at the steps the now-profitably airline is taking to grow.

A large plane rolls down a runway with a sunny blue sky behind it as brokers reveal their outlook for the Flight Centre share price in FY23

Image source: Getty Images

All aboard! Qantas eyes major capacity growth

Owners of Qantas shares, rejoice! The airline is on an upwards trajectory and flying on schedule.

Its latest industry update comes just weeks after the flying kangaroo posted a $1 billion profit for the six months ended December. It also reduced its debt levels by $1.5 billion over the half, ending the period at $2.4 billion.

Turning to 2023, Qantas said it recorded the most on-time arrivals of any Australian airline in February.

That's after the airline saw just 18.3% of flights arriving late in January, according to Australian Competition & Consumer Commission (ACCC) data, compared to peers Virgin Australia – 26.2% of flights arrived late – and Regional Express Holdings Ltd (ASX: REX) – 18.9% of flights ran late. Though, Qantas' budget leg Jetstar saw 34.6% of its January flights arriving later than scheduled.

Such recent "strong operational performance" means Qantas is confident to launch more planes, according to today's release.

The group expects its domestic capacity to reach 102% in the April quarter. That's up from 98% in the current quarter. Meanwhile, it will expand many of its international services next week.

Looking further ahead, it plans to grow its domestic and international flying capacity by around 15% over the next six months.

Not to mention, Qantas and Jetstar are expecting to fly "several million" travellers in the Easter school holiday period, with more than 700,000 flying over the long weekend.  

Australian flight prices ease from record highs

All that comes as ACCC data finds the cost of flying has eased from record highs posted in December amid lower jet fuel prices.

Australian discount fares fell 34% in January, but average revenue per passenger remained 13% higher than pre-pandemic levels.

Qantas share price outperforms ASX 200

The Qantas share price has outperformed in recent months, gaining 7.4% year to date. It's also 27.1% higher than it was this time last year.

Comparatively, the ASX 200 has gained 1% since its first close of 2023 and has fallen 4.4% over the last 12 months.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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