Qantas Airways Ltd [ASX:QAN] is the flag airline carrier of Australia, noted for its iconic ‘Flying Kangaroo’ livery. The carrier is also the third oldest airline in the world, having been founded 100 years ago in November 1920. Beginning international flights in 1935, Qantas has become synonymous with Australian tourism.
As of 2019, Qantas had 61% of the Australian domestic market. Though this market dominance had been on a slight decline over the back decade, its budget carrier, Jetstar, has helped bolster domestic numbers. Qantas also carried 26% of all passengers traveling in and out of Australia.
Qantas is a blue chip stock, so investors should not expect large returns from its share price. Instead, profits are returned to investors via a dividend. QAN has steadily increased its turnover year-on-year over the past decade. While its domestic market share has tapered off somewhat, QAN has consistently grown its passengers year-on-year and has expanded its fleet size by nearly 25% over the past decade.
Given the volatility that can arise in the airline and tourism industries, QAN’s profits have varied wildly. However, after taking a loss of $2.84 billion in 2014, profits have since grown to $891 million in 2019.
Investors in Qantas should be wary that its share price is sensitive to fluctuations in commodities, such as fuel, as well as tourism demand.