Qantas Airways, Virgin Blue Gain as RBS, Macquarie Affirm `Buy' Ratings
Qantas Airways Ltd., and Virgin Blue Holdings Ltd. gained in Sydney trading after Royal Bank of Scotland Group Plc and Macquarie Group Ltd. analysts today affirmed “buy” ratings on the airline stocks.
Qantas rose as much as 4.7 percent, the most since Dec. 21, and traded 3.9 percent higher at A$2.68 at 12:59 p.m., local time. Virgin Blue rose 2.9 percent to 53 cents. Both companies are among airlines approved by the government last week for its travel needs.
Virgin Blue should see its government sales rise to match its 33 percent share of the Australian domestic market, according to RBS analysts led by Mark Williams, who rates both stocks “buy.” The approvals eased concern that a government review of its travel arrangements would lead to a cap on Qantas market share of official travel. Qantas should retain the majority of government work, Russell Shaw, an analyst at Macquarie in Sydney, wrote in a report. He reiterated his ”outperform” rating on the shares.
Macquarie has share price targets of A$3.43 for Qantas and 76 Australian cents for Brisbane-based Virgin Blue.
Finance Minister Lindsay Tanner announced the list of airlines approved for government travel and the ban on frequent- flier miles on May 9, as the government seeks to save A$160 million ($144 million) on travel expenses.