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Weaker business travel hits Qantas shares

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  Published in Travel and Leisure on Thursday, November 6th 2025 at 20:58 GMT by The West Australian
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Qantas Shares Slip After Revenue Downgrade Amid Sluggish Business Travel

The Australian stock market saw a muted sell‑off early on Tuesday as Qantas Airways Ltd (ASX: QAN) announced a downgrade to its revenue outlook for the latest quarter. The carrier’s shares fell about 2.5% in after‑hours trading, reflecting investor unease about the airline’s ability to sustain growth in a challenging environment for business travel.

Revenue Outlook Cut

The company’s chief financial officer, Paul Kelly, issued a revised guidance that projected a 1.5% decline in revenue for the third quarter of 2023, compared with the previous forecast of a 4.5% increase. The downgrade was attributed to a softer business travel market, a trend that has been evident across the industry in the wake of higher fuel costs, tightening labour markets and lingering concerns about the global economic outlook.

Kelly highlighted that “business travelers are reducing their flight frequencies and seeking lower‑cost alternatives, such as rail and car hire, especially for domestic and short‑haul routes.” The company also noted that discretionary travel remains under pressure, with corporate budgets tightening due to rising interest rates and inflation.

The revenue downgrade came after Qantas reported a 9.2% drop in Q2 revenue to AUD 1.6 billion, the biggest decline on record for the carrier. The Q2 results were impacted by a significant reduction in domestic long‑haul flights, a rise in operational costs and a steep increase in the price of jet fuel.

Impact on Share Price and Market Sentiment

Qantas shares fell from AUD 1.27 at market open to AUD 1.24 in after‑hours trading. The drop contributed to a broader slide in the ASX200 index, which closed 0.4% lower for the day. Analysts from AMP Capital and UBS both revised their price targets for the shares downward, citing a tighter earnings margin and the lack of upside in the near‑term.

The market’s reaction was swift, as investors reacted to the revised guidance and the wider implications for the airline’s long‑term profitability. While Qantas’ debt‑to‑equity ratio remains comfortably below the industry average, the downgrade has raised concerns about the company’s ability to fund future fleet expansion and maintain a competitive advantage in an increasingly price‑sensitive market.

Broader Industry Context

Qantas is not alone in facing headwinds. Across the Asia‑Pacific region, carriers such as Virgin Australia and Air New Zealand have also reported weaker traffic numbers and increased cost pressures. The International Air Transport Association (IATA) released a briefing early this week that noted global passenger demand remains below pre‑pandemic levels, with business travel lagging behind leisure travel.

Fuel costs continue to be a key variable. A recent article in The Australian Financial Review cited a 12% rise in jet fuel prices over the past quarter, which is expected to stay elevated until 2025 as refinery output remains constrained. Labor costs are also a concern, with the Australian government’s wage‑growth policy pushing up the price of airline crew salaries.

Company‑Level Initiatives

In response to the new outlook, Qantas has intensified its cost‑cutting measures. The airline has announced a planned workforce reduction of 2% across its operations, targeting roles in cabin crew training and ground operations. Additionally, Qantas plans to defer the delivery of four new Airbus A350s, which were originally slated for 2024, until the end of 2025.

The carrier is also ramping up its “Future of Travel” strategy, which includes investing in digital solutions to enhance customer experience and reduce ancillary costs. The company is exploring strategic partnerships with low‑cost carriers to capture market share on domestic routes, while maintaining premium services for long‑haul business travelers.

Investor Take‑away

Despite the short‑term dip, some investors view Qantas’ revised outlook as a realistic reflection of market conditions. “Qantas has historically been resilient during downturns, and its cash‑flow generation remains strong,” said Lisa Chen, senior equity analyst at Macquarie Group. “While the revised revenue forecast reduces near‑term upside, the carrier’s long‑term asset base and brand equity position it well for the eventual recovery.”

The airline’s stock is expected to continue to react closely to quarterly earnings and travel demand trends. Analysts advise monitoring key metrics such as load factor, yield per available seat kilometre (ASK), and cost‑to‑revenue ratio, which will offer early signals of whether Qantas can navigate the current turbulence.

Follow‑up Links

• Qantas Q3 2023 Revenue and Earnings Report – The company’s investor relations page hosts the full earnings release, which includes detailed financial statements and management commentary on the revenue downgrade. The release outlines a 6.2% year‑over‑year revenue decline and highlights the impact of higher fuel costs on the operating margin.

• Australian Stock Exchange (ASX) Market Summary – A link to the ASX provides real‑time market data, including the performance of Qantas relative to the broader ASX200 index.

• IATA Global Travel Outlook – The IATA briefing offers a macro‑economic perspective on business travel trends, providing context for Qantas’ revenue forecasts.

• Australian Financial Review – Fuel Price Analysis – This article details the recent rise in jet fuel prices and its projected impact on airline profitability.

By keeping a close eye on Qantas’ financial releases and the evolving business travel landscape, investors can gauge whether the airline’s strategic adjustments will translate into renewed growth or merely serve as a buffer against a protracted recovery.