Is the Qantas share price going to take off after today’s news?


One of the best performers on the Australian share market on Friday has been the Alliance Aviation Services Ltd (ASX: AQZ) share price.

In afternoon trade the Australia-based charter operator’s shares are up 9% to $2.51.

Why is the Alliance Aviation Services share price ascending?

This morning Qantas Airways Limited (ASX: QAN) announced that it has acquired a 19.9% stake in the charter operator.

The release revealed that the 19.9% stake was acquired for an average price of $2.40 per share and for a total cost of $60 million.

What is Alliance Aviation Services?

Alliance Airlines is Australasia’s leading provider of contract, charter, and allied aviation services to mining, energy, tourism, and government sectors.

In addition to this, a wide range of specialised aviation services including wet leasing, airport management, aircraft trading, parts sales, and engine leasing are provided in Australia and internationally.

The main attraction for Qantas appears to be its exposure to the resources sector. In the release Qantas noted that the resource sector “continues to stimulate travel demand in Western Australia and Queensland in particular.”

What now?

Qantas advised that it expects to ultimately “seek regulatory approval from the ACCC to build on its current shareholding, with a longer-term view of taking a majority position in Alliance Airlines in order to better serve the charter market by unlocking synergies.”

However, for now, it is supportive of the business as usual approach of Alliance Airlines management and will not seek board representation.

Is this a good move by Qantas?

I think the two companies are a good fit for each other, especially given how Alliance has been a long-term provider to the Qantas Group and flies regional services on behalf of it.

All in all, I see this as another reason to invest in Qantas ahead of rivals Air New Zealand Limited (ASX: AIZ) and Virgin Australia Holdings Ltd (ASX: VAH). However, this is on the proviso that oil prices don’t surge higher from here.

Not keen on airlines? Then don’t miss out on these top shares that have been tipped as wealth winners in February.

NEW! Top 3 Dividend Bets for 2019

With interest rates likely to stay at rock bottom for months (or YEARS) to come, income-minded investors have nowhere to turn… except dividend shares. That’s why The Motley Fool’s top analysts have just prepared a brand-new report, laying out their top 3 dividend bets for 2019.

Hint: These are 3 shares you’ve probably never come across before.

They’re not the banks. Not Woolies or Wesfarmers or any of the “usual suspects.”

We think these 3 shares offer solid growth prospects over the next 12 months. The first two currently offer fat, fully franked yields. The last is a surprising REIT offering you the benefits of being a landlord with none of the hassle! You’ll discover all three names and codes in “The Motley Fool’s Top 3 Dividend Shares for 2019.”

Even better, your copy is free when you click the link below. Fair warning: This report is brand new and may not be available forever. Click the link below to be among the first investors to get access to this timely, important new research!

The names of these top 3 dividend bets are all included. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies move – we may be forced to remove this report.

Click here to claim your free copy right now!

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019



Source link Finance News Australia

Enter your Email Address

Leave a Reply

Your email address will not be published. Required fields are marked *