Australia's aviation sector is unique because it is competitive and free-market, allowing domestic airlines to operate within strict safety and security regulations.
Recent significant advancements in aviation technology have opened up new possibilities, including the use of drones and electric aircraft. Older aircraft that have electric propulsion installed will operate more sustainably and efficiently, which will promote economic growth and the creation of jobs in new industries.
Australia's aviation sector is expected to experience strong growth in passenger movements over the next 20 years, with an estimated 4% annual increase. It is projected that air passenger movements will double to 227.9 million by 2025–2026. 63 million passengers pass through Sydney Airport, 46.4 million through Melbourne Airport, 39 million through Brisbane Airport, 17.7 million through Perth Airport, and 11.7 million through Adelaide Airport, to name a few notable airports.
Furthermore, the prediction shows that domestic and international passenger movements will increase by 3.8% and 4.4% annually, respectively, ending in 177.7 million domestic passengers and 50.2 million international passengers by 2025–2026. The necessity for airport authorities and airlines to augment and improve the capacity of capital city airports and associated infrastructure in order to meet this unprecedented increase in demand is highlighted by this noteworthy growth. ( Source: Australian competition and consumer commission )
Here we have presented the best ASX airline companies listed in the ASX as follows:
Note: The market cap and the share price of the selected ASX company below are mentioned as of 16 February 2024.
Qantas Airways Limited (ASX: QAN)
Market cap: $10.08 billion
CMP: $5.845
Positive changes to the aviation operations are anticipated as a result of the Qantas Group's strategy of fleet renewal and expansion. The company is still on track to undergo a substantial fleet transformation, even though there have been some supply chain hiccups that may cause delays in some deliveries. Its dedication to improving different aspects of its operations is demonstrated by the arrival of QantasLink A220s, Alliance Airlines E190s and mid-life A320s, and A321 converted freighters. Furthermore, Jetstar's commitment to increasing the market presence of its low-cost carrier is demonstrated by the addition of A321LRs and A321XLRs to its fleet. A significant milestone that could lead to the opening of new long-haul routes and revenue streams is the anticipated delivery of the first Airbus A350-1000 ULRs for Project Sunrise in FY2026.
Air New Zealand Limited (ASX: AIZ)
Market cap: $2.01 billion
CMP: $0.598
The company has started to witness a degree of softness in domestic travel, particularly corporate and government travel, with late booking activity remaining weaker than the prior year. Similarly, softer leisure demand in both the domestic and trans-Tasman markets had also been observed. However, demand for travel to North America remained solid, while demand for Asia and the Pacific Islands remained unchanged. The company continues to monitor booking patterns and will be taking adequate steps with its marketability to continue driving revenue growth. AIZ’s long-term aims remain transformative, and the eventual decarbonisation of its fleet could also provide strong sustainability benefits. Furthermore, the valuation of the company also remains highly lucrative, as seen through its earnings and cash flows.
Alliance Aviation Services Limited (ASX: AQZ)
Market cap: $458.09 million
CMP: $2.85
Alliance Aviation Services Ltd. is set to undergo substantial growth in capital expenditure by acquiring an additional 30 E190 aircraft, with deliveries staggered over the next three fiscal years. Additionally, the company has secured four E190 airframes to address a capacity shortfall in early 2024. This expansion strategy allows Alliance to meet current and future service commitments and positions it for growth in the aviation sector. The contract extension with BHP Iron Ore Pty Ltd provides revenue stability for five years, aiding financial planning and ensuring operational continuity. This partnership not only safeguards AQZ's revenue but also has the potential to enhance its industry reputation, paving the way for future expansion.
Reference: *All Data has been sourced from Company announcements and Refinitiv, Thomson Reuters
Frequently Asked Questions (F.A.Q)
What are the best airline ASX companies?
• Qantas Airways Limited (ASX: QAN)
• Air New Zealand Limited (ASX: AIZ)
• Alliance Aviation Services Limited (ASX:AQZ)
Why does Qantas Airways Limited become a prospect in 2024?
With a healthy $2.47 billion profit for FY2023, Qantas is continuing its incredible financial comeback. The company's focus on fleet modernization and sustainability, achieved through the use of sustainable aviation fuel (SAF), is in line with current industry trends. Its dedication to providing investors with value is further demonstrated by an on-market share buyback program that can return up to $500 million to shareholders. Qantas has proven to be resilient and adaptable in the face of supply chain difficulties. These elements point to a bright future for the business, as does its strong financial performance.
Why is Australia's aviation sector significant?
Aviation becomes crucial to Australia’s economy and quality of life. Aviation underpins Australian business, transporting workers, tourists, and high-value freight.
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