How AI can help Qantas shares fly higher

Qantas Airways Ltd (ASX: QAN) shares are in the green today.

Shares in the S&P/ASX 200 Index (ASX: XJO) airline stock closed yesterday trading for $6.15. In morning trade on Thursday, shares are swapping hands for $6.16 apiece, up 0.2%.

For some context, the ASX 200 is down 0.03% at this same time.

That’s this morning’s price action for you.

Now here’s how artificial intelligence (AI) can help streamline the company’s costs and services and potentially throw up some ongoing tailwinds for Qantas shares.

Qantas shares bringing artificial intelligence into the skies

If it seems like everywhere you turn AI is cropping up, you’re not alone.

And the skies are no exception.

Though still in its nascent stages, AI is already helping companies improve efficiency, provide better client services and cut costs. And the technology could offer a sustainable boost to Qantas shares.

One area where AI could help the ASX 200 airline drive down costs is maintenance.

Amazon chief technology officer Werner Vogels said the revolutionary new tech could help aeroplane mechanics identify parts that may be close to failing so they can be repaired or replaced.

According to Vogels (quoted by The Australian):

The detection part is crucial for airlines with limited options for maintenance because it means they can bring the aircraft to the place where it can undergo maintenance ahead of time.

There’s huge cost savings to be had in that.

AI has already been helping the performance of Qantas shares by reducing fuel requirements.

In 2018, the ASX 200 airline began using the technology to adjust aircraft’s flight paths in accordance with weather, the particular plane’s capabilities and its fuel supply. AI is estimated to have cut some 2% of Qantas annual jet fuel costs. And with fuel costs in the range of $5 billion a year, that’s no chump change.

Qantas also used AI to help monitor global airspace for potential closures, other aircraft, or potential dangers like volcanic ash.

Why shareholders are eyeing Joyce’s new bonus

In other news, not all Qantas shareholders are pleased that former CEO Alan Joyce is poised to receive another $16 million (or more) payout from the ASX 200 airline.

While that payment is under review, shareholder sentiment is unlikely to influence the outcome.

“‘How much is too much?’ is the wrong question to ask,” Sandon Capital managing director Gabriel Radzyminski said (quoted by The Australian).

Radzyminski added:

Ultimately, it is a question for the board, who in turn are answerable to their shareholders. Boards need to think very carefully about what contractual obligations they enter into when negotiating with CEOs and executives.

Qantas shares are up 15% in 2024.

The post How AI can help Qantas shares fly higher appeared first on The Motley Fool Australia.

More reading

• Could Qantas shares be poised to catch some Chinese tailwinds?
• 3 reasons to be positive on ASX 200 shares in FY25 (and 3 to be wary)
• Where Aussies are spending their money, and the ASX shares that could benefit
• These ASX shares could rise 25% to ~50%
• Why are ASX investors so excited by the Qantas share price?

Motley Fool contributor Bernd Struben 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.