The Qantas Airways Ltd (ASX: QAN) share price is up 0.3% at the time of writing.
Shares in the S&P/ASX 200 Index (ASX: XJO) airline stock ended the day yesterday at a new closing record high of $9.06. In morning trade on Wednesday, shares are swapping hands for $9.09 apiece, up 0.3%.
If shares in the Flying Kangaroo can maintain altitude, today will mark yet another new record closing high.
As you can see in the above chart, the Qantas share price has soared more than 69% in 2024. Shares are up some 35% from the pre-pandemic levels of early 2020.
The ASX 200 airline looks to have thrown off the tailwinds from the series of legal cases and operational blunders that plagued it during the post-COVID reopening months.
Under its new CEO, Vanessa Hudson, Qantas has spent heavily on a range of services to restore customer trust and rebuild loyalty.
The airline is also benefiting from lower fuel costs. And it has bought back $2 billion of its own shares over the last two years.
And Morgan Stanley thinks the Qantas share price can keep lifting in 2025.
Greater heights for the Qantas share price in 2025?
With luxury spenders increasingly turning to global travel, Morgan Stanley forecasts more growth ahead for the Qantas share price and United States carrier Delta Air Lines Inc (NYSE: DAL).
According to Morgan Stanley equity strategist Simon Clark (courtesy of The Australian Financial Review):
With headwinds building for traditional luxury goods stocks, particularly in relation to Chinese demand, we see airlines as a more effective way to leverage long-term luxury consumer demand growth trends…
While airline companies have been a challenging investment in the past, we believe the outlook has turned structurally more favourable, particularly for premium carriers.
Clark noted that premium airlines are improving their profitability amid "rising secular demand growth for premium tickets, alongside diminishing reliance on the marginal economics of economy class".
And he expects this trend has legs, stating:
This trend is likely to continue over time with the expanding wealth of the ultra-high-net-worth affluent class and with consumers progressively demanding more services and experiences over consumer goods.
The broker forecasts "a brighter outlook" for the Qantas share price relative to the challenging conditions the airline industry has been facing in past years.
Clark concluded:
Qantas International revenue per available seat kilometres is tracking at around 40% higher than pre-COVID during the current year, with the company noting strength in leisure demand, and specifically premium cabins…
Importantly, we believe this shift is being driven by one of the most compelling long-term demographic forces, the enduring growth of the affluent consumer.
