Qantas shares hit a high

SHARES in Qantas have hit their highest point this year as investors digest the national carrier’s lessened focus on capacity.

Qantas shares closed 4.7 per cent, or 6c, higher at $1.33, its highest price since October last year.

The share price rise comes on the back of an interesting week, and a troubling year, for the national carrier.

On Wednesday, Qantas announced it would add no new capacity in the first three months of the 2014-15 financial year, fuelling speculation among commentators and analysts that the capacity war between Qantas and Virgin Australia was effectively over.

“With the new Virgin Australia directors from partners Air New Zealand, Singapore Airways and Etihad due on to the Virgin Australia board next month, we doubt whether Virgin Australia will respond aggressively to Qantas’s olive branch,” Macquarie analyst Sam Dobson said in a note to clients.

Earlier this month, Qantas said it expected to shed 2200 jobs by the end of June as part of a restructure to create $2 billion in gross savings by fiscal 2017.

Qantas told the Macquarie Australia Conference that it was targeting $800 million in cost savings by fiscal 2015 and was set to reduce ex-fuel spending by more than 10 per cent, with positive free cashflow expected from fiscal 2015 onwards.

The airline announced in February that it would cut 5000 jobs after swinging to a first-half net loss.