Own Qantas shares? Guess what the airline is being accused of now

Qantas Airways Limited (ASX: QAN) shares outperformed the S&P/ASX 200 Index (ASX: XJO) this week, hitting 52-week highs on Wednesday.

Qantas shares closed up 5.3% on the day. This followed an unexpected profit guidance upgrade, which came on the heels of a previous upgrade in early October.

The ASX 200 airline lifted its half-year forecast for underlying profit before tax by $150 million from its October guidance to a new range of $1.35 billion to $1.45 billion.

Part of the profit guidance boost is attributable to a strong rebound in domestic and international travel figures.

Another part, as recent air travellers can likely attest to, is a sharp lift in ticket prices.

Which brings us to the latest accusations being levelled at the flying kangaroo.

What’s this about price gouging?

Qantas shares made The Australian Financial News headlines after Regional Express Holdings Ltd (ASX: REX) deputy chairman John Sharpe said the high price for domestic airfare Qantas is charging represents price gouging.

Sharpe acknowledged the industry-wide impacts of soaring jet fuel costs and multi-decade high inflation levels. “Fuel prices are high and inflation is a problem and impacting us,” he said.

Indeed, Qantas estimates it will spend a record $5 billion fuelling its fleet in the 2023 financial year.

But Sharpe doesn’t believe the elevated prices Qantas is charging domestic passengers aligns with those higher costs.

“It just doesn’t stack up,” he said.

According to Sharpe (quoted by the AFR):

You could literally buy one of our business class airfares for half the price of an economy seat on some Qantas flights – and we’re on exactly the same planes. We operate a 737-800 MG to and from Melbourne. It’s the same plane, the same route and I would say the in-cabin product is as good as theirs…

I don’t think Virgin is gouging people but with Qantas and their prices it would appear that they are gouging.

How have Qantas shares been tracking this year?

Qantas shares have staged a strong rebound in 2022, gaining 18% so far. That compares to a 4% year to date loss posted by the ASX 200.

The post Own Qantas shares? Guess what the airline is being accused of now appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 shares on the coveted Goldman Sachs conviction list
• Why is the Qantas share price having such a top run this week?
• 5 of the craziest things making news on the ASX this week
• Leading broker tips Qantas share price to climb to a new record high
• 5 things to watch on the ASX 200 on Thursday

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.

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