What’s creating tailwinds for the Qantas share price today?

The Qantas Airways Limited (ASX: QAN) share price is currently up by 0.63%. It’s outperforming the S&P/ASX 200 Index (ASX: XJO), which is currently down by around 0.07%.

Reporting season is in full swing right now. Qantas is expecting to report its full year result on 25 August 2022, which is when investors will get an insight into the ASX airline share’s performance in FY22 and Qantas could also provide guidance for FY23.

Some ASX travel shares have already reported, including Corporate Travel Management Ltd (ASX: CTD) which outlined a recovery of demand in its FY22 result.

Qantas has recently said it’s seeing strong travel demand across all categories, helping net debt improve to around $4 billion by the end of FY22. It’s expecting underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of between $450 million to $550 million for the second half of FY22.

What’s going on with the Qantas share price?

One of the main things to keep in mind with airlines is that one of the key variable expenses, fuel, can have a significant impact on profitability and demand in the shorter term.

If the oil price goes higher, airlines need to decide how much to increase ticket prices by and what that might do to demand. If they don’t pass on the higher fuel cost, the profit would be impacted. There’s more to Qantas’ profit generation than just oil prices, but it can have an important influence.

Overnight, as noted by CommSec, the oil price fell by around 3% as it continues to decline from the previous highs seen after the Russian invasion of Ukraine when energy markets were disrupted.

New flight training centre

Qantas did make an announcement to the media today, though it’s not necessarily important to the Qantas share price.

The airline announced it will train pilots at a new, purpose-built centre in Sydney for its current and future fleet, including the aircraft that will operate non-stop flights from the east coast of Australia to London and New York.

It’s a new multi-million-dollar facility for St Peters near Sydney Airport. It will provide training for up to 4,500 new and current Qantas and Jetstar pilots and cabin crew each year from early 2024.

This centre will have up to eight full motion flight simulators, including for the Airbus A350 and A320 family of aircraft that were recently ordered.

It will have fixed flight training devices, emergency procedures equipment with aircraft cabin mock-up, and classroom and training facilities. Qantas said that senior Qantas and Jetstar training captains will train pilots from the two airlines while global training provider CAE will maintain the simulators and manage the day-to-day operations of the centre.

The Qantas CEO Alan Joyce said:

Qantas has trained its pilots and crew in Sydney for more than half a century and we look forward to bringing this critical function back to New South Wales with this custom-built facility.

Sydney will be the launch city for our non-stop flights to London and New York, and will now be the home of pilot training for the A350s, which will operate these flights from 2025.

As our international network recovers from the impact of COVID and we grow our fleet, this new training centre will give us the simulator capacity to train our new and current pilots.

Having flight training centres in all three eastern states, where the majority of our crew reside, will provide significant cost savings and efficiencies by training them at their home base.

Qantas share price snapshot

The Qantas share price has risen by 9% over the last month.

The post What’s creating tailwinds for the Qantas share price today? appeared first on The Motley Fool Australia.

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More reading

• What’s lifting the Qantas share price on Monday?
• Qantas share price unimpressed despite $15m solution to ‘well-publicised challenges’
• Why did the Qantas share price fly higher today?
• Why is the Qantas share price beating the ASX 200 today?
• ‘Downside is less severe’: Why some brokers are still bullish on the Qantas share price

Motley Fool contributor Tristan Harrison 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 Corporate Travel Management Limited. 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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