Fund Manager Summary
The fund managers believe that the outlook for Qantas Airways Ltd presents a significant opportunity despite recent challenges. In their opinion, the company has emerged from the pandemic stronger, supported by a $1b cost out program and an improved market position. They note the massive pent-up demand for both business and leisure travel, which is expected to persist even amidst macroeconomic headwinds. Fund managers also highlight Qantas' strategy to address higher input costs by passing some expenses onto travelers and modestly reducing domestic travel capacity over the next year. They regard Qantas as one of the world’s highest quality airlines, emphasizing its dominant industry position, robust loyalty division, and strong management team.
Source: Trading View
Commentary From The Managers
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L1 Capital
16 Oct 2025
$10.85
Summary
- Qantas turnaround is gaining momentum with shares showing modest growth during the September quarter.
- Reaffirmation of 2030 targets indicates confidence in future performance.
- 10% to 12% FY26 EBIT guidance for the Frequent Flyer Division highlights strong operational expectations.
- Supportive industry backdrop due to post-COVID supply constraints affecting global airlines.
- Robust consumer demand for travel is driving higher yields amidst constrained aeroplane supply.
- Operational improvements are evident across both Qantas and Jetstar airlines.
- Fleet renewal program and Project Sunrise are expected to enhance service offerings, including direct flights to London and New York.
- High-margin frequent flyer business continues to expand.
- Valuation remains attractive with a PE ratio of 8.6 and a dividend yield of nearly 4.5%, expected to grow over time.
- Parallels drawn between Qantas in late 2023 and Mineral Resources, indicating a promising turnaround phase.
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Commentary From The Managers
L1 Capital
16 Oct 2025
$10.85
- Qantas turnaround is gaining momentum with shares showing modest growth during the September quarter.
- Reaffirmation of 2030 targets indicates confidence in future performance.
- 10% to 12% FY26 EBIT guidance for the Frequent Flyer Division highlights strong operational expectations.
- Supportive industry backdrop due to post-COVID supply constraints affecting global airlines.
- Robust consumer demand for travel is driving higher yields amidst constrained aeroplane supply.
- Operational improvements are evident across both Qantas and Jetstar airlines.
- Fleet renewal program and Project Sunrise are expected to enhance service offerings, including direct flights to London and New York.
- High-margin frequent flyer business continues to expand.
- Valuation remains attractive with a PE ratio of 8.6 and a dividend yield of nearly 4.5%, expected to grow over time.
- Parallels drawn between Qantas in late 2023 and Mineral Resources, indicating a promising turnaround phase.
Summary
Plato Investment Management
25 July 2025
$10.84
- Plato Investment Management identifies Qantas Airways Ltd as a surprising dividend pick.
- Qantas is currently performing strongly in the post-COVID travel boom.
- The company operates in a cosy duopoly in the Australian market, focusing on domestic travel and frequent flyer earnings.
- Despite some negative sentiment towards Qantas, customer loyalty remains strong, with continued bookings.
- Qantas is considered relatively cheap, with a P/E ratio of around 10 and potential for growth.
Summary
L1 Capital
3 July 2025
$10.61
- Qantas is recognized as a successful turnaround story.
- In 2023, the airline faced significant public criticism.
- Share price dipped below $5 during challenging times.
- Under CEO Vanessa Hudson and Chair John Mullen, key operational and governance issues were addressed.
- Jetstar’s performance and a high-growth frequent flyer business contributed to recovery.
- Leadership renewal played a crucial role in the turnaround.
- Share price has doubled over the past year.
- L1 Capital views this as a case study of equity markets rewarding effective execution.
- This turnaround serves as an encouraging analogue for other portfolio holdings, such as Mineral Resources.
Summary
L1 Capital
30 June 2025
$10.74
- Qantas shares have increased by 19% during the quarter due to strong trading conditions and lower oil prices.
- Shares have more than doubled since October 2023, reflecting strong earnings, management changes, and improved customer experiences.
- Virgin's listing on the ASX will lead to increased scrutiny of its financials, promoting rational competition.
- L1 Capital believes Qantas is well-positioned for medium-term growth with its two strong brands, Qantas and Jetstar.
- Qantas operates Australia's best loyalty business, expected to double earnings in the next 5-7 years.
- New, fuel-efficient aircraft deliveries and Project Sunrise will enhance long-haul routes from 2026.
- Despite the share price rally, Qantas trades at a FY26 P/E of only 9x, compared to 10-14x for international peers.
- The current P/E does not fully reflect Qantas's leading industry position and growth potential in Asia-Pacific travel.
Summary
Alphinity Investment Management
17 June 2025
$10.30
- Alphinity Investment Management identifies Qantas (ASX: QAN) as an overweight position in its portfolio.
- Renewed earnings trajectory under new leadership is a significant driver.
- CEO Vanessa Hudson has stabilized the airline following Alan Joyce's departure.
- Improvements in customer metrics, including on-time performance and net promoter score, have been noted.
- Strategic reinvestment in the fleet is delivering real efficiency gains.
- Current demand for travel is supported by reasonably full employment and anticipated interest rate cuts.
- The combination of better management and macroeconomic tailwinds is contributing to earnings upgrades.
- Improvements are driven by fundamental, stock-specific factors rather than market volatility.
Summary
L1 Capital
31 May 2025
$10.66
- Santos (Long -10%) underperformed due to a significant decline in oil prices.
- Brent crude prices fell 21% from US$77/bbl to US$61/bbl.
- Key drivers included U.S. tariff announcements raising concerns over global economic activity and lower oil demand.
- OPEC+ announced a faster than anticipated partial end of voluntary supply cuts.
- Even at ~US$60/bbl, Santos’ asset base is materially undervalued.
- Santos continues to make significant progress on key growth initiatives.
- The Barossa project is 95% complete and on track for first production in 2025.
- The Pikka project is more than 80% complete.
- Completion of these projects will mark an inflection point for cash flow and potential shareholder returns.
Summary
Ten Cap
30 Apr 2025
$8.85
- Ten Cap has reduced its position in Qantas (ASX: QAN) as part of a broader underweight strategy in the travel sector.
- The fund manager appreciates QAN’s strong domestic business.
- However, global travel is facing significant challenges due to rising political uncertainty.
- This perspective has been reinforced by Flight Centre's downgrade to guidance.
Summary
L1 Capital
31 Mar 2025
$9.05
- Qantas Airways Ltd (ASX:QAN) has been a strong contributor to the Catalyst Fund’s performance despite share price volatility in mid-late 2023.
- The share price is up over 80% in the last 12 months as of March 31, 2025.
- Qantas operates across four segments: Domestic, International, Jetstar, and Loyalty.
- L1 Capital believes in Qantas' leading market position in the attractive Australian domestic aviation market.
- Challenges faced in mid-2023 included operational issues and legal cases, impacting corporate reputation.
- Management actions since mid-2023 have led to a strong recovery in performance and share price.
- Despite recent volatility, L1 Capital sees a compelling investment case for Qantas at current levels.
- Approximately 80% of group EBIT comes from Domestic, Jetstar, and Loyalty businesses, which are insulated from broader market volatility.
- Qantas' strong market share allows it to serve a wide network of routes effectively.
- The Loyalty division is expected to double earnings over the next 5-7 years, providing a capital-light revenue source.
- The management team, led by CEO Vanessa Hudson, has effectively addressed prior issues.
- Future catalysts include ongoing actions to enhance customer experience, a large fleet re-investment program, and a strong balance sheet.
- Qantas is currently trading at 7.7x FY26 P/E, which L1 Capital believes does not reflect the business's quality.
Summary
Ten Cap
31 Jan 2025
$9.42
- Qantas has shown strong performance over the past 6 months
- Entering a "sweet spot" due to domestic market structure
- Strong customer demand is a driving factor
- Recent trading data supports a positive outlook
- Likelihood of capital returns strengthens the investment thesis
- Valuation upside is reasonable compared to global peers
Summary
Vinva Investment Management
31 Dec 2024
$8.97
- Qantas (QAN) has shown strong operational momentum with a +4% YoY increase in domestic passenger numbers for the September quarter.
- Improved Revenue per Available Seat Kilometre (RASK) attributed to lower domestic capacity.
- Better international volumes and lower fuel costs contributed positively to the performance.
- Vinva Investment Management continues to hold an overweight position in QAN, driven significantly by value signals.
Summary
Equity Trustees Asset Management
31 Dec 2024
$8.97
- QAN’s AGM trading update was strong and provided confidence in the outlook.
- Earnings have been upgraded throughout the quarter due to ongoing cost reductions and capacity discipline.
- Fuel prices have fallen, and demand has remained stable despite the cost-of-living pressures.
- The domestic market industry structure has improved, enabling pricing discipline.
- The company valuation has been attractive, and earnings have surprised on the upside.
- Offshore peers have also performed well and supported industry valuation gains.
Summary
L1 Capital
31 Dec 2024
$8.97
- Qantas' share price performance remains strong, up +21% this quarter.
- Shares have nearly doubled since October 2023 due to strong earnings and management changes.
- AGM update in October 2024 raised expectations for Domestic yields driven by strong travel demand, especially in corporate travel.
- Lower fuel prices are also benefiting the company this financial year.
- International segment expectations are stable, with Loyalty set for double-digit earnings growth.
- Qantas is positioned for strong shareholder returns, including the return of fully franked dividends from H125.
- Qantas holds Australia’s best loyalty program, expected to double earnings over the next 5-7 years.
- Introduction of new fuel-efficient aircraft and Project Sunrise will enhance operations.
- Despite the share price increase, Qantas trades at a FY25 P/E of 8.6x, below its potential valuation.
- Strong industry position and medium-term growth in travel demand indicate continued investor opportunity.
Summary
L1 Capital
30 Nov 2024
$8.82
- Qantas (Long +9%) shows strong share price performance, up around 80% since October last year.
- Favourable trading conditions persist, reflecting strong earnings, management, and board changes.
- At the recent AGM, Qantas upgraded expectations for Domestic yields due to strong travel demand and improved corporate travel.
- Lower fuel prices have positively impacted performance this financial year.
- International segment expectations remain largely unchanged, while Loyalty aims for double digit earnings growth.
- Strong execution in business supports robust shareholder returns, including a return to fully franked dividends from H1 25.
- Qantas has Australia’s best loyalty business, with potential to double earnings in the next 5-7 years.
- Delivery of new, more fuel-efficient aircraft is underway, coupled with Project Sunrise facilitating direct flights from Melbourne/Sydney to London and New York from 2026.
- Despite recent share price gains, Qantas trades at a FY25 P/E of only 8.3x, not reflecting its leading position or growth potential.
- Underappreciated capital-light loyalty division emphasizes structural medium-term growth in travel demand.
Summary
L1 Capital
31 Oct 2024
$8.08
- Qantas share price has increased by 9% in October, reflecting strong performance.
- The company highlighted ongoing improvements in its operating environment during their AGM.
- Expectations for Domestic yields have been upgraded due to robust travel demand and improvements in corporate travel.
- Qantas is benefiting from lower fuel prices this financial year.
- International segment expectations remain unchanged, while loyalty is poised for double-digit earnings growth.
- The update indicates a shift toward robust shareholder returns, with fully franked dividends expected from H1 25.
- Qantas is well positioned for medium-term growth due to Australia’s best loyalty program, expected to double earnings in 5-7 years.
- New, more fuel-efficient aircraft are on the way, along with Project Sunrise enabling new direct routes to London and New York by 2026.
- Trading on a FY25 P/E of 7.5x, Qantas has a leading industry position with underappreciated growth potential in the loyalty sector.
Summary
L1 Capital
30 Sept 2024
$7.42
- Qantas (Long +27%) reported a strong FY24 result aligned with expectations.
- Positive trading outcomes from both Qantas and Jetstar contributed to robust financial performance.
- Strong cash flow supports a new $400m share buyback announcement.
- Guidance to reinstate fully franked dividends starting from 1H25, with an estimated 4.1% fully franked dividend yield.
- Domestic demand remains strong, with a reduction in jet fuel prices positively impacting earnings.
- New CEO Vanessa Hudson is successfully addressing customer pain points, improving key metrics like on-time performance and Net Promoter Score.
- Growth in Frequent Flyer participation signals improving brand health for Qantas and Jetstar.
- Qantas is positioned well for medium-term success due to its leading loyalty program, expected to double earnings over the next 5-7 years.
- New, fuel-efficient aircraft and Project Sunrise are expected to enhance operational capabilities from 2026.
- Despite a leading industry position and growth potential, Qantas is trading at a low FY25 P/E of 7.5x.
- The capital-light loyalty division is significantly undervalued by the market.
Summary
L1 Capital
31 July 2024
$6.46
- Qantas shares gained over 10% in July, following strong performance in the June quarter from a low base.
- Limited news flow, aside from regional airline REX entering voluntary administration.
- L1 Capital believes Qantas is well positioned over the medium term, leveraging its strong loyalty program.
- Australia’s best loyalty business is projected to double earnings in 5-7 years.
- New, fuel-efficient aircraft are set to be delivered, enhancing operational efficiency.
- Project Sunrise to enable direct flights from Melbourne/Sydney to London and New York by 2026.
- Qantas has sufficient balance sheet capacity for share buybacks and potential fully franked dividends next year.
- CEO Vanessa Hudson is effectively addressing customer pain points, improving sentiment among customers and investors.
- Qantas trades at a low FY25 P/E of ~6x, reflecting a leading industry position and undervalued growth prospects.
- The capital-light loyalty division remains largely underappreciated by the market.
Summary
L1 Capital
30 June 2024
$5.91
- Qantas shares gained over the quarter by +11% after outlining plans to enhance its Loyalty offer.
- The revised Loyalty program had a smaller impact on earnings than anticipated.
- Qantas has Australia’s best loyalty business, projected to double earnings over the next 5-7 years.
- The airline will receive new, more fuel-efficient aircraft in the upcoming years.
- Project Sunrise will enable direct flights from Melbourne/Sydney to London and New York starting in 2026.
- Qantas has sufficient balance sheet capacity for share buybacks and to potentially resume fully franked dividends next year.
- The new CEO, Vanessa Hudson, is addressing customer pain points, improving sentiment among customers and investors.
- Qantas trades on a FY25 P/E of approximately 6.3x, despite its dominant industry position.
- The company is positioned to benefit from structural tailwinds of Asian inbound tourism to Australia.
- The loyalty division is high growth and capital-light, yet remains undervalued by the market.
Summary
L1 Capital
30 Apr 2024
$5.90
- Qantas shares rallied over the month after outlining plans to enhance its Loyalty program.
- The revision to the Loyalty offer had a smaller impact on earnings than expected.
- Qantas articulated strong medium-term benefits of investing in the Loyalty program.
- L1 Capital believes Qantas is well positioned over the next few years.
- Qantas has the best loyalty business in Australia, projected to double earnings in 5-7 years.
- The airline is acquiring new, fuel-efficient aircraft.
- Project Sunrise will enable direct flights from Melbourne/Sydney to London and New York.
- Qantas has adequate balance sheet capacity for share buybacks and resuming dividends next year.
- The new CEO, Vanessa Hudson, is addressing customer ‘pain points’ to improve sentiment.
- Qantas trades on a FY25 P/E of only 6x, despite its dominant market position.
- The company benefits from strong structural tailwinds in Asian inbound tourism.
- Its capital-light loyalty division remains underappreciated by the market.
Summary
L1 Capital
31 Mar 2024
$5.49
- Qantas shares have recovered +6% in the month due to robust domestic demand despite higher airfares.
- L1 Capital continues to believe Qantas is extremely well positioned to compete strongly with a $1b cost reduction program.
- Exceptional loyalty program enhances Qantas’s market stance.
- Plans to improve the Loyalty offer will be outlined in April, enhancing access for Frequent Flyer members.
- New CEO Vanessa Hudson is addressing customer pain points which could improve sentiment from customers and prospective investors.
- Qantas is expected to have Australia's best loyalty business, potentially doubling earnings in the next 5-7 years.
- Brand new, more fuel-efficient aircraft and Project Sunrise facilitate direct long-haul flights.
- Strong balance sheet capacity to support share buybacks and recommence fully franked dividends next year.
- Currently trades at a P/E of only 6x, highlighting its dominant industry position and underappreciated growth potential.
- Exposed to structural tailwinds of Asian inbound tourism and a high growth, capital-light loyalty division.
Summary
L1 Capital
31 Dec 2022
$5.94
- Qantas shares rallied over the quarter by +20% after upgraded profit forecasts.
- First half profit before tax expectations upgraded twice, reaching a range of $1.35-1.45 billion.
- Strong domestic and international travel demand drives growth.
- Exceptional yield management contributing to positive performance.
- Net debt expected to reduce by $900 million to $2.3-2.5 billion by December 31, 2022.
- Qantas considering further shareholder returns due to low net debt levels.
- L1 Capital views Qantas as having emerged from the pandemic stronger with significant improvements.
- $1 billion cost-out program enhancing market position.
- Massive pent-up demand for leisure travel anticipated to persist.
- Potential to achieve close to $1 of earnings per share if FY24 targets are met.
- Qantas currently trading at ~6.5x P/E, indicating strong share price upside through earnings growth.
- Shift towards more predictable domestic and loyalty businesses expected to positively impact earnings mix.
Summary
L1 Capital
30 Nov 2022
$6.24
- Qantas shares have increased by 7%, following its second earnings upgrade in six weeks.
- The company has raised its first half profit before tax expectations by $150 million, now estimating $1.35-1.45 billion.
- Qantas plans to further reduce net debt by $900 million, targeting a total of $2.3-2.5 billion by 31 December 2022.
- There is an active consideration for additional shareholder returns due to low net debt.
- L1 Capital continues to view Qantas as having emerged stronger from the pandemic, supported by a $1 billion cost reduction program and an improved market position.
- Massive pent-up demand for leisure travel is anticipated to continue despite macroeconomic challenges.
- If management achieves its FY24 targets, there is potential for earnings per share to approach $1.
- Qantas is currently trading at approximately 6x P/E, indicating significant potential for share price upside through earnings growth.
- There is potential for a P/E re-rating as earnings shift towards more predictable domestic earnings and loyalty business.
Summary
L1 Capital
31 Oct 2022
$5.84
- Qantas shares increased +16% following a strong trading update.
- First half profit before tax guidance of $1.2b – $1.3b, exceeding market expectations by over 150%.
- Growth driven by strong domestic travel demand and exceptional yield management.
- Net debt significantly reduced to below target range, providing headroom for further capital management.
- L1 Capital views Qantas as stronger post-pandemic due to a $1b cost out program and improved market position.
- Expectations for sustained demand in leisure and business travel despite macroeconomic challenges.
- Potential to deliver close to $1 in earnings per share if FY24 targets are met.
- Qantas currently trading at approximately 6x P/E, presenting upside potential through earnings growth and P/E re-rating.
- Shift in earnings mix towards predictable domestic earnings and loyalty business.
Summary
L1 Capital
30 Sept 2022
$5.02
- Qantas shares rose by +12% during the quarter, following results at the top end of guidance.
- Reaffirmation of FY24 financial targets highlights ongoing confidence in the company’s performance.
- Significant reduction in net debt enabled a ~$400m share buyback announcement.
- Travel recovery momentum continues, with leisure demand up 25% above pre-COVID levels.
- Corporate and small to medium enterprise demand is nearing pre-COVID levels.
- Qantas has faced operational challenges this year, but improvements in call centre performance, flight delays, and baggage handling are being observed.
- Operational issues are complex but expected to resolve gradually.
- Qantas has emerged from the pandemic stronger than before, aided by a $1b cost out program.
- Massive pent-up demand for leisure and business travel expected to continue despite economic headwinds.
- If FY24 targets are met, earnings per share could approach $1, with current trading around ~5x P/E.
- Potential for over 100% share price upside driven by earnings growth and a P/E re-rating as focus shifts towards higher quality domestic earnings and loyalty business.
Summary
L1 Capital
31 Aug 2022
$5.32
- Qantas shares have increased by 17% following strong results and reaffirmation of FY24 financial targets.
- Significant reduction in net debt has allowed for a ~ $400m share buyback announcement.
- The travel recovery is gaining momentum, with leisure demand up 25% above pre-COVID levels and corporate/SME demand close to pre-COVID levels.
- Improvements are being seen in operational performance, including call centre efficiency, reduced flight delays/cancellations, and better baggage handling.
- Operational issues are complex but are expected to resolve gradually.
- Qantas is viewed as strengthened post-pandemic through a $1b cost reduction program and an improved market position.
- Expectation of continued strong demand for both leisure and business travel despite macroeconomic challenges.
- If FY24 targets are met, potential to deliver close to $1 in earnings per share, with current P/E valuation around ~5x.
- Estimated more than 100% upside potential through earnings growth and a P/E re-rating, as earnings mix shifts towards higher quality domestic earnings and loyalty business.
Summary
L1 Capital
30 June 2022
$4.47
- Qantas shares declined by 14% over the quarter, despite reaffirming second half EBITDA guidance.
- Decline attributed to market concerns over economic slowdown and high jet fuel costs.
- L1 Capital views Qantas as having emerged from the pandemic stronger, supported by a $1b cost-out program.
- The company has an improved market position and is benefiting from massive pent-up demand for travel.
- Qantas plans to address near-term higher input costs by passing some costs to travellers and reducing domestic travel capacity.
- L1 Capital considers Qantas to be one of the world’s highest quality airlines, citing its dominant industry position and high-growth loyalty division.
- The airline is backed by a well-regarded management team.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
Amid economic turbulence and soaring fuel prices, Qantas appears poised to leverage its robust market position and pent-up travel demand. With strategic cost management and a commitment to quality, it seems the airline could emerge stronger, even as challenges loom.
Last Updated: 16 Oct 2025
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Frequently Asked Questions
Who is investing in Qantas Airways Ltd (ASX:QAN)?
Fund managers including L1 Capital, Ten Cap, Equity Trustees Asset Management, Alphinity Investment Management, Plato Investment Management and Vinva Investment Management have invested in Qantas Airways Ltd (ASX:QAN).
Why do fund managers invest in Qantas Airways Ltd?
Fund managers invest in Qantas Airways Ltd due to its strong recovery post-pandemic, evidenced by a robust cost-cutting program and a solid market position. Despite recent share price declines linked to economic concerns and rising jet fuel costs, Qantas is expected to benefit from sustained demand for travel. Its ability to manage costs, alongside a high-growth loyalty program and effective management, reinforces its status as a leading airline.
What happened to Qantas Airways Ltd (ASX:QAN)?
Fund managers are investing in Qantas Airways Ltd due to its strong turnaround trajectory and reaffirmed long-term targets, including a 10% to 12% EBIT guidance for its Frequent Flyer Division. The airline benefits from a supportive industry environment with constrained aircraft supply post-COVID and robust consumer travel demand, leading to higher yields. Operational improvements through fleet renewal and initiatives like Project Sunrise enhance growth prospects. Additionally, Qantas's attractive valuation, with a PE ratio of 8.6 and a dividend yield of nearly 4.5%, further solidifies its investment appeal.