Why did the Qantas share price outperform the ASX 200 in FY22?

It was the best of times; it was the worst of times. Fortunately, the Qantas Airways Limited (ASX: QAN) share price sailed through financial year 2022 relatively unscathed. Though, that doesn’t mean it was easy for the national carrier. It suffered major disruptions, lockdowns, and travel bans.

As of the final close of June, the Qantas share price was $4.47. That marks a 4% tumble over the course of last financial year.

That was a better performance than that of the broader market. The S&P/ASX 200 Index (ASX: XJO) slumped around 10% in that time.

Let’s recap what the last 12 months have been like for the flying kangaroo.

Qantas share price outperforms the ASX 200 in FY22

Cast your mind back to July 2021. Australia was pushing forward with its COVID-19 vaccine rollout while its borders remained tightly locked. Meanwhile, Sydney was suffering through what grew to be a four-month lockdown and Omicron wasn’t to be identified for another five months.

Qantas’ earnings

With all that in mind, it likely came as no surprise that Qantas’ full-year earnings – released in August 2021 – may have disappointed investors. The airline posted a $2.35 billion pre-tax loss for financial year 2021. It brought in just $5.93 billion of revenue over the period.

And the first half of this financial year – dubbed by CEO Alan Joyce “one of the worst halves of the entire pandemic” – wasn’t much better. The airline announced another $1.28 billion loss for the six months ended 31 December. Though, its debt position was notably stronger.

In fact, at the end of this financial year, the airline’s debt levels are expected to have fallen to well below pre-pandemic levels. Much of that improvement was due to the sale of 13.8 hectares of land in Sydney’s Mascot for $802 million.

What else happened last financial year?

Of course, lessening travel restrictions likely helped the stock outperform in financial year 2022.

Australia’s international borders slowly reopened from November and tourists were welcomed back to the country in February.  

Though, a plan for Qantas to work with Japan Airlines was knocked back by the ACCC in September while the Australian airline battled with unions and the Fair Work Commission over an enterprise agreement.

Qantas also announced its plan to acquire Alliance Aviation Services Ltd (ASX: AQZ).

 What could drive the Qantas share price next?

The future looks set to be bright for the airline. Qantas previously announced its expectations that it would turn its first post-COVID-19 profit in the second half.

It expects to announce underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of between $450 million to $550 million for the six months ended 30 June.

However, it also expects to post another loss for the financial year just been. It’s on track to return an underlying profit for financial year 2023.  

Finally, Qantas has announced plans to grow both its international and domestic fleets, ordering a number of new aircraft to be delivered in the coming years.

The post Why did the Qantas share price outperform the ASX 200 in FY22? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper 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 recommended Alliance Aviation Services Ltd. 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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