At time of writing the Qantas Airways Ltd [ASX:QAN] share price sits at $5.49, down 1.08% from the previous day’s trade.
Qantas gave a market update recently and it seems there is light at the end of the tunnel.
Qantas in the year of COVID-19
In February this year, the COVID-19 pandemic showed up on our doorstep and put a stop to life as we all knew it.
Nationwide, people and business felt the effect. Few were as affected as Qantas.
International and state borders closed and flights were grounded.
The share price fell more than 70% and more than 6,000 jobs were made redundant
- Group Domestic capacity at 68% of pre-COVID levels for December, rising to nearly 80% for Quarter Three.
- Maintaining strong liquidity of $3.6 billion.
- Balance sheet repair process expected to begin in Second Half of FY21.
- Restructuring and recovery program remains on track to deliver at least $1 billion in annual savings from FY23.
The company is set to start repairing the balance sheet during the second half of FY21, as domestic borders reopen.
Qantas will post a substantial statutory loss for FY21; it expects to be close to breakeven.
Where is the Qantas share price headed?
Qantas took a beating this year, as all global airlines have. It has to be said they have survived better than their peers.
Air France took a government bailout to the tune of 10 billion euros.
Lufthansa took a 9-billion-euro bailout from the German government.
While here at home Virgin Airlines went into administration before being sold to Bain Capital.
From the low in March the share price is up 173.61% at time of writing.
If the uptrend can continue, then the level of $6.13 may provide future resistance.
Should the price start to fall back, then the levels of $5.19 and $4.76 may be enough to halt the fall.
Qantas really took cost-cutting measures to the extreme to survive this crisis. Even mothballing their fleet of 12 Airbus A380s until 2023.
The drastic measures Qantas made this year may have been the very thing that kept it alive and is now helping the strong recovery.
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