There is one industry laughing all the way to the bank.
In contrast with export companies whose sales have slumped due to the high Aussie dollar, the travel industry is enjoying a boost.
Qantas Airlines (QAN) and travel service provider Flight Centre (FLT) both hit record highs today after having upgraded their outlook for FY2008 today, following a strong start to the fiscal year.
Reports of Qantas' baggage handlers in Adelaide walking off the job yesterday afternoon didn't hinder the shares reaching an all-time high of $6.06 by early morning.
Shares in Flight Centre also added as much as 6% to a record $31.85 after a forecast of 25% in its pretax profit for the full year.
AMP Capital Investors' head of investment strategy Shane Oliver, told Reuters Finance today: "Stocks which are exposed to the domestic market and consumer spending locally are seeing upgrades. Many of the retailers, some of the travel companies are benefitting."
"Air travel is running at record levels. People are generally upbeat, so they are spending in shops and on holidays," he added.
Wednesday's consumer sentiment survey by The Westpac/Melbourne Institiute reinforced this viewwpoint
Consumer sentiment has risen for the first time in three months according to the survey.
The two major factors contributing to this customer satisfaction were the Federal Election and the decision to leave interest rates steady last week by the Reserve Bank.
The sentiment index climbed 1.8% this month from November to a seasonally adjusted 112.5, according to the survey released yesterday (like all surveys of this kind a reading higher than 100 shows optimists outnumber pessimists.)
No doubt the strong sentiment is aided by the strong Aussie dollar and subsequent higher purchasing power of Australian companies overseas.
Qantas' chief executive officer, Geoff Dixon today said the Qantas Group's profit before tax for 2007/08 was now expected to be around 40% higher than last year.
This is 10% above his prediction in August of around 30% expected profit.
"Since then Qantas' operating businesses have continued to perform strongly, with the results for the first five months of 2007/08 above forecast and the forward booking profile also remaining robut", Dixon said.
Flight Centre Limited's managing director Graham Turner said while results during 2006-07's first half were relatively disappointing, strong growth in 2007/08 pointed to a healthy full year outcome.
"Operation improvements and good trading conditions generally have fuelled strong global sales growth and laid the foundations for the full year."
"Total transaction value continues to track above our target of 15% annual growth. The second half of 2006/07 was, of course, an extremely strong period, so it will be difficult to maintain this growth trajectory for the full year."
Last month, Flight Centre acquired a large United States' travel agency groups, Liberty Travel for a total of US$135 million.
FLT will release half year results on 26 February 2008.
