Qantas's glittering run came to an end yesterday with the shares suffering their first fall in the seven days of trading since APA pulled its offer once and for all and the airline's board lost chairman, Margaret Jackson and director, James Packer.
The shares shed 1c to $5.73 after touching a day's high of $5.75 and a low of $5.66.Turnover tapered from Monday's heavy 44 million to 30 million shares.
The stock hit an intraday high of $5.81 on Monday before falling back 8c to end the day at $5.73.
Surprisingly there was no real news yesterday: just a statement from the company re-marketing Monday's news of an increase in international capacity, especially on the Pacific and China routes.
Perhaps that news of extra capacity was a bit of a reality check for some investors who in the past would have regarded such an announcement with some trepidation.
Even now extra capacity means lower earnings in the minds of many analysts, shareholders and commentators, even on routes where load factors are extra high and profits abundant: such as across the Pacific.
If Monday's statement had been released before the failed bid from Airline Partners, it would have brought a chorus of 'tut, tuts' from analysts and others in the broking community who would wonder if it was wise and then come down on the side of straddling the fence and worry about downside risk!
Some would say 'no' and wonder if the airline's management was doing the right thing.
How times have changed in the wake of the failed APA offer: now everyone is a believer, including Qantas management.
The airline says it will start flying to Santiago, Chile from November 2008 and it also revealed three new weekly flights to Los Angeles which will be added from March next year – taking the total number to 43 a week.
As well, an additional service to Johannesburg will start in November 2008 and an extra return service to Shanghai will be added from August 2008.
Qantas also said more services to China will be offered for the 2008 Beijing Olympics.
Qantas Group General Manager Sales and Distribution, Rob Gurney said the schedule changes were a sign of Qantas' commitment to Australian tourism.
Mr Gurney said the expanded Qantas' international schedule included:
– an additional return service between Sydney and Shanghai (from August 2007), taking the total number of flights offered on the route to five per week;
– two additional Brisbane-Los Angeles services each week (from March 2008);
– one additional Sydney-Los Angeles service each week (from March 2008);
– commencement of services to South America (from November 2008);
– An additional one weekly service between Sydney and Johannesburg (from November 2008).
"China is an important and growing aviation market and Qantas has been concentrating on growth opportunities on its China routes since we recommenced operations there in 2004. From August, we will offer eight return services a week from Sydney to China – five to Shanghai and three to Beijing.
"We will be looking at further opportunities to expand our presence in China – for example, we will be offering supplementary services to Beijing to coincide with the 2008 Olympics."
Mr Gurney said the new international schedule would include three extra return services per week from Los Angeles to Australia – two into Brisbane and one into Sydney from March 2008.
"The two extra Brisbane-Los Angeles services will see Qantas offer a daily operation between the two cities."
Mr Gurney said this would take the number of services Qantas offered from mainland USA to Australia to a record 43 per week to Sydney, Melbourne and Brisbane from Los Angeles, San Francisco and New York.
"Qantas also offers an extensive network of codeshare services in both North and South America, providing services through our partner airlines throughout the US and to Canada, Chile and Mexico," he said.
"We expect to operate our direct services between Sydney and Santiago from November 2008, using B747-400 aircraft.
"We also plan to increase services to South Africa to six per week from November 2008, subject to Government negotiation and approval, with the aim of moving to daily services."
The extra flights to and from the US is a sign of how profitable and how tight capacity must be across the Pacific.
It is one of the big three profit centres (the others are the domestic business, not Jetstar, and the Kangaroo route between Sydney and London with BA) for Qantas.
