Why did the Qantas share price nosedive 6% today?

Falling plane share price represented by a declining line with a model plane at the end.Falling plane share price represented by a declining line with a model plane at the end.

The Qantas Airways Limited (ASX: QAN) share price had a horror day on the market today.

Shares in the airline plunged 6.20% to $4.84 at the end of trading on Tuesday. For perspective, the S&P/ASX 200 Index (ASX: XJO) fell 4.19% today.

Let’s take a further look at how the Qantas share price performed amid wider market carnage today?

Qantas share price takes a hit

Qantas shares were not the only ASX travel shares that fell today. Flight Centre Travel Group Ltd (ASX: FLT) shares plunged 4.66%, while Webjet Limited (ASX: WEB) shares tumbled 7.89%. Travel shares are falling amid a tough day on the ASX 200 today. This followed US major share markets plunging overnight.

The S&P 500 (INDEXSP: .INX) fell 4% in the United States, while the NASDAQ (INDEXNASDAQ: .IXIC) plunged 4.7% on Monday.

Higher than expected inflation figures from the US drove speculation that the US Federal Reserve could raise rates by 0.75%.

US airlines did not escape this carnage. American Airlines Group Inc (NASDAQ: AAL) shares dived 9.45% and United Airlines Holdings Inc (NASDAQ: UAL) shares plunged 10% on Monday. Delta Airlines Inc (NYSE: DAL) shares also fell 8.29%.

In other news, Rex Airlines has again accused Qantas of “predatory” attacks on the Regional Express Holdings Ltd (ASX: REX) network. REX announced it would commence flights between Melbourne and Devonport in Tasmania. This followed Rex pulling out of the Melbourne to Albury route. Chairman John Sharp said:

Qantas predatory attacks on Rex’s network mean that we no longer can support the marginal routes and we need to channel our resources to the biggest regional routes where the financial returns are much better.

However, in comments reported by the Sydney Morning Herald, QantasLink CEO John Gissing dismissed these claims from Rex, describing Qantas’ decision to fly certain regional routes as competition. Gissing said:

What Rex calls ‘predatory behaviour’ is actually competition which provides these regional communities with choice, more services and lower fares

Share price snapshot

The Qantas share price has climbed nearly 3% in the past 12 months, while it has fallen more than 3% year to date.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has shed around 10% in a year.

Qantas has a market capitalisation of $9.19 billion based on its current share price.

The post Why did the Qantas share price nosedive 6% today? appeared first on The Motley Fool Australia.

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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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