qantas travel tax

Your Essential Guide to Qantas Flight and Travel Tax Deductions as a Sole Trader

As a sole trader, you know that every dollar counts when managing your money. That's why it's essential to understand tax deductions and how you can maximise them. Qantas is by far the most popular airline in Australia. If you're a frequent flyer or travel for business, you could be eligible for tax deductions on your Qantas flights and travel expenses. In this article, we'll guide you through the rules and regulations for claiming tax deductions on Qantas travel and provide you with insider tips on how to maximise your claims. So, sit back, relax and enjoy the rest of your flight (pardon the pun).

Reasons Why Small Businesses Get Tax Deductions 

The  Australian Taxation Office  (ATO) provides tax deductions to small businesses to support and encourage entrepreneurship and economic growth. Small businesses are considered the backbone of the Australian economy. By giving them tax deductions, the government aims to reduce their tax burden and help them reinvest their money back into their businesses. 

Small businesses typically have limited financial resources and face many challenges in the early stages of their development, including attracting customers, hiring staff, and acquiring capital. Tax deductions allow small businesses to reduce their taxable income and keep more of their hard-earned money, which they can use to invest in their businesses and create jobs. This, in turn, can stimulate economic growth and benefit the wider community. 

Understanding Tax Deductions for Sole Traders 

Definition of tax deductions   .

Tax deductions  refer to the expenses that can be deducted from your assessable income to lower your taxable income. This means you only pay tax on the remaining amount after subtracting your deductions. The ATO allows sole traders to claim tax deductions on expenses directly related to earning income for their business. 

Eligibility criteria for sole traders  

To claim tax deductions as a sole trader, you must meet specific eligibility criteria:

• You must be running a business as a sole trader and have an  Australian Business Number (ABN) .
• The expenses must be incurred while running your business, and they must be directly related to earning income.
• You must have records to support your claims, such as receipts,  invoices , and bank statements. 

Common small business tax deductions 

As a sole trader, you can claim tax deductions on a wide range of expenses, including: 

• Home office expenses, such as rent, utilities, and internet 
• Vehicle expenses, such as fuel, maintenance, and registration 
• Travel expenses, such as airfare, accommodation, meals, and incidentals 
• Equipment and asset expenses, such as computers, phones, and furniture 
• Insurance premiums, such as public liability and professional indemnity 
• Marketing and advertising expenses, such as website development and social media advertising 
• Professional development and education expenses, such as conferences and courses 

It's important to note that not all expenses are deductible, and  some expenses may only be partially deductible . For example, if you use your car 50% of the time for personal use and 50% for business use, you can only claim 50% of the expenses as a tax deduction. 

Qantas Flight and Travel Tax Deductions for Sole Traders 

Eligibility criteria for claiming qantas tax deductions .

If you're a  sole trader  who frequently travels for business on Qantas flights, you may be eligible for tax deductions on travel expenses. To claim deductions, your travel must be directly related to earning income, and you must keep your receipts and travel records in the event of a  tax audit . These records will prove that the travel expenses were incurred for business purposes.   

How to calculate the tax deduction amount for Qantas flights 

To calculate the tax deduction amount for your Qantas flights and travel expenses, you must keep the receipts for the airfare, accommodation, meals, and incidentals. 

Qantas tax deduction example  

For example, if you fly from Sydney to Melbourne on a Qantas flight for a business meeting and your airfare costs $300, you can claim a tax deduction of $300. Similarly, if you stay in a hotel in Melbourne for two nights at the cost of $250 per night, you can claim a tax deduction of $500. On the other hand, if you hire a car for $500 at the end of your work trip to visit family, this should not be claimed. The car hire does not meet the eligibility test for business purposes. 

Best practice tips for keeping track of Qantas travel expenses for tax purposes 

Keeping accurate records of all your expenses is essential to maximise your Qantas flight and travel tax deductions. Here are some best practices to follow: 

• Keep all your  receipts and reconcile  them with your bank transactions. 
• Use a dedicated  debit card  for business travel to make tracking and reconciling expenses easier. 
• Keep a travel diary to record the purpose and details of each trip, including dates, times, and locations. 
• Use automated accounting software like Thriday to streamline the process of categorising your expenses. 

By following these best practices, you can ensure you have all the necessary documentation to support your tax claims and maximise your deductions. 

Other Travel Expenses That Are Tax Deductions for Sole Traders 

In addition to flights, other travel-related expenses can be claimed as deductions:

Airport parking and transport expenses 

If you travel for business purposes and need to  park your car at the airport  or use public transport to get to and from the airport, these expenses can be claimed as tax deductions. You can claim the total parking and transport expenses as long as they are directly related to earning income for your business. 

Travel insurance expenses 

Travel insurance  can cover a range of business travel risks, including lost luggage, flight cancellations, and medical emergencies. As a sole trader, you can claim the cost of travel insurance as a tax deduction. If your travel insurance covers personal and business trips, you can only nominate the portion of insurance you spent on business trips. 

Frequent flyer points and rewards 

If you frequently travel for business on Qantas flights and earn  frequent flyer points and rewards , these can be a great way to save money on future travel. If you purchased a business flight and partially covered the cost with frequent flyer points, you can still claim the  portion you paid in cash as a tax deduction .  

How Thriday Can Help You Maximise Your Qantas Flight and Travel Tax Deductions 

As a sole trader, managing your accounting and bookkeeping can be time-consuming and overwhelming, especially when tracking your travel expenses and claiming tax deductions. Thriday can help simplify the process and maximise your tax deductions for Qantas flights and travel expenses. 

Automated accounting and bookkeeping 

Thriday's  automated accounting and bookkeeping software  can help you easily track your expenses, including Qantas flights and travel expenses. By using your business bank account* and  Visa Debit card , you can automatically categorise and  reconcile your expenses , saving you time and reducing the risk of errors. 

Dedicated travel expense tracking 

Thriday's travel expense tracking feature can help you quickly record and categorise your travel expenses, including Qantas flights, airport parking, travel insurance, and other costs related to your business travel. You can also attach receipts and invoices directly to your expense entries, making it easier to support your tax claims. 

"Thriday's travel expense tracking feature can help you quickly record and categorise your travel expenses, including Qantas flights, airport parking, travel insurance, and other costs related to your business travel."  

Tax deduction maximisation 

Thriday's tax deduction maximisation feature will automatically identify all the tax deductions you are eligible for, including Qantas flight and travel tax deductions. By using advanced algorithms and AI, Thriday can automatically identify potential deductions, saving you time and ensuring that you don't miss out on any deductions. 

Join Thriday today for free  to start maximising your Qantas flight and travel tax deductions. Thriday can help you simplify your accounting and bookkeeping, saving you time and reducing stress while maximising your tax deductions and helping you save money. With Thriday, you can focus on growing your small business while leaving accounting to the experts. 

Tax Deduction FAQs 

Can i claim travel expenses as a sole trader .

Yes, as a sole trader, you can claim travel expenses directly related to your business activities. This includes flights, accommodation, meals, and transportation expenses, as long as they are necessary and reasonable. 

Can I claim flights as a business expense? 

Yes, you can claim flights as a business expense if they are directly related to your business activities, such as attending meetings or conferences, visiting clients or suppliers, or conducting research. However, you cannot claim flights for personal trips or vacations. 

Can I claim international flights as a business expense? 

Yes, you can claim international flights as a business expense if they directly relate to your business activities. However, you need to keep a record of the purpose of your travel and the activities you undertook on your trip to justify your claim. 

How do I claim travel and flight expenses as a sole trader? 

To claim travel and flight expenses as a sole trader, you must keep records of your expenses, such as receipts, invoices, and travel itineraries. When preparing your tax return, you can deduct these expenses from your business income. It is recommended to seek professional advice from a tax accountant to ensure your claims are valid and compliant with tax laws. 

As a sole trader, claiming tax deductions for Qantas flights and travel expenses can be a complex process, but it's essential to ensure you maximise your deductions and save money. By understanding the rules around Qantas flight and travel tax deductions and keeping accurate records of your expenses, you can claim tax deductions for a range of expenses, including flights, accommodation, meals, transport, and other costs related to your business travel. 

Thriday's automated accounting and bookkeeping software can help you streamline the process and maximise your tax deductions. With features such as dedicated travel expense tracking and tax deduction maximisation, Thriday can help you save time and reduce stress while ensuring you get all potential tax deductions. 

So,  join Thriday for free today  and start maximising your Qantas flight and travel tax deductions. With Thriday, you can focus on growing your small business while leaving accounting to the experts. 

DISCLAIMER: Team Thrive Pty Ltd ABN 15 637 676 496 (Thriday) is an authorised representative (No.1297601) of Regional Australia Bank ABN 21 087 650 360  AFSL 241167 (Regional Australia Bank).  Regional Australia Bank is the issuer of the transaction account and debit card available through Thriday. Any information provided by Thriday is general in nature and does not take into account your personal situation. You should consider whether Thriday is appropriate for you.

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How to use your American Express Qantas Travel Credit

If your American Express ®  Card offers an annual Qantas Travel Credit, you can use this credit to put towards any domestic or international Qantas flight (i.e. a QF flight number on your ticket).

For information on how to use your Travel Credit before 1 May 2023. Click here .

Just follow these easy steps to use your Qantas Travel Credit

Visit the American Express Travel Online website to book eligible domestic or international Qantas flights.

Make a booking of $450 or more and select the Travel Credit at checkout.

Pay for your booking using your eligible Qantas American Express Ultimate Card and we will credit the amount to your Account within 3 business days.

Step 1: Log in

Log in  to your American Express account. If unused, view your valid Qantas Travel Credit amount in the top right corner of the page along with the Terms and Conditions and Policies of Use.

Step 2: Search

Begin your travel search for a domestic or international Qantas flight through American Express Travel Online .

Step 3: Apply Credit

At checkout, redeem your Qantas Travel Credit by selecting the Travel Credit radio button. You may redeem one Travel Credit per booking

Step 4: Book Trip

Redeem your Qantas Travel Credit against your booking. Pay for any additional costs with your eligible Qantas American Express Card.

See where your Travel Credit can take you

More about your Qantas Travel Credit

Your Qantas Travel Credit is issued annually on the anniversary date that your Account was opened. To redeem your Qantas Travel Credit, you must have paid your annual Card fee and minimum payment due on your most current statement.

Your Qantas Travel Credit can only be used towards one single eligible international or domestic Qantas flight (i.e. a QF flight number on your ticket) to the value of $450 or more on your eligible Card, booked and paid through American Express Travel Online

Keep in mind that if you cancel your travel booking, we will not be able to refund your Travel Credit.

Be sure to use your annual Qantas Travel Credit before it expires. To find out when it expires, Log In to your Account and hover your mouse over the Travel Credit to view the expiry date and Terms and Conditions.

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• Frequently Asked Questions

Which Cards offer the Travel Credit and how much will I receive?

The following Qantas Travel Credit amount is offered on a yearly basis to eligible Card Members of the following Cards:

• Qantas American Express Ultimate Card: $450 Qantas Travel Credit.

What happens if I cancel my booking or Card?

If your booking is cancelled, and your Qantas Travel Credit has already been used and associated statement credit applied to your account, you will forfeit your annual Qantas Travel Credit benefit and American Express may reverse the statement credits issued. If you cancel your Card, change your rewards program or Card type you will no longer be eligible for the Qantas Travel Credit.

When will my Qantas Travel Credit expire?

To view your Qantas Travel Credit Expiry please log in to  American Express Travel Online  and hover over the Qantas Travel Credit details.

I'm a new Card Member, when will my Travel Credit be available?

In order to redeem the Travel Credit, your Card must be in good standing and you must have paid the annual fee and minimum payment by the due date.

Can I redeem multiple Travel Credits for a single booking?

No, you can only use one Qantas Travel Credit per booking.

Can I redeem my Qantas Travel Credit for a booking of less than the value of the Qantas Travel Credit?

No. If your booking is less than the value of your Qantas Travel Credit, you will not be able to use your Qantas Travel Credit benefit.

Can I book my travel over the phone with assistance from a consultant?

No, the Qantas Travel Credit can only be redeemed online for new bookings at American Express Travel.

Can I use my Travel Credit against airline surcharges and taxes?

Yes, the Travel Credit is applied to the total booking amount. The total booking amount, including tax and charges, must be equal to or greater than the Travel Credit amount.

Can I use my Qantas Travel Credit to purchase travel for my family and friends?

Yes, you can use the Qantas Travel Credit to book travel for other people, such as family members or friends, provided the tickets are not for resale, promotional, or commercial use. You do not have to travel with them.

Terms and Conditions

Qantas American Express Ultimate Primary Card Members are eligible for an annual $450 Qantas Travel Credit, subject to the full Qantas Travel Credit Terms and Conditions  . The Qantas Travel Credit can be redeemed through American Express Travel Online on a single eligible travel booking for Qantas Flights (i.e. a QF flight number on your ticket) by selecting the Qantas Travel Credit when you checkout. All Qantas Flight travel is subject to Qantas  Conditions of Carriage. To redeem the Travel Credit, the full value of the Travel Credit (or more) must be charged to the eligible Primary Card. The Qantas Travel Credit can be used for 365 days from the benefit anniversary date and cannot be used past the expiration date. If your booking is cancelled, and your Qantas Travel Credit has already been used and associated statement credit applied to your account, you will forfeit your annual Qantas Travel Credit benefit and American Express may reverse the statement credits issued. You need to be able to spend on the Card to access the Qantas Travel Credit benefit and it should be credited to your Card Account within 3 business days but may take up to 30 days.

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Qantas slashes fares on business, premium economy on 20 international routes

High rollers rejoice, Qantas has launched the first stand-alone sale for business and premium economy seats since the pandemic.

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Qantas drops huge Asia flight sale

Qantas is discounting its business and premium economy seats for the first time since the Covid pandemic.

The first stand-alone “premium cabin” sale since the pandemic was announced on Friday.

Sale prices apply to 20 international routes, starting at $1199 Sydney (or Melbourne) to Auckland and back in business class, ranging up to Sydney to London return, in business class, for $8949.

Discounts are on offer for round trips to Los Angeles, New York, Nadi, Seoul, Hong Kong and Tokyo as well.

Sale seats can be booked for trips to be taken between July 2024 and May 2025; the sale is open and closes on Thursday night.

The sale pulls in Qantas’ rejigged frequent flyer program. Seats booked with points incur additional taxes, fees and carrier charges.

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Qantas this week finalised a $211m deal to become sole owner of online travel business TripADeal.

The airline is also building its first domestic business lounge in Adelaide.

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Virgin Australia has just dropped 300,000 sale fares from $45 in one of its “best-value deals of the year”.

For the next five days, one Aussie airline is slinging flights to Japan for as little as less than $350, with some fares starting at just $239.

The Flying Kangaroo has just dropped a huge sale to popular Asian destinations with a Bali return flight just $679.

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11 Credit Cards That Earn Qantas Points

After spending seven years in the U.S. Air Force as an Arabic linguist, Carissa is now a freelance writer using points and miles to fund a four-year (and counting!) adventure. She previously worked as a reporter for The Points Guy. Her writing has since been featured in numerous publications, including Forbes, Business Insider, and The Balance. When she's not flying, you'll usually find her in a Priority Pass lounge somewhere, sipping tea and cursing slow Wi-Fi.

Megan Lee joined the travel rewards team at NerdWallet with over 12 years of SEO, writing and content development experience, primarily in international education and nonprofit work. She has been published in U.S. News & World Report, USA Today and elsewhere, and has spoken at conferences like that of NAFSA: Association of International Educators. Megan has built and directed remote content teams and editorial strategies for websites like GoAbroad and Go Overseas. When not traveling, Megan adventures around her Midwest home base where she likes to attend theme parties, ride her bike and cook Asian food.

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Table of Contents

1. The Platinum Card® from American Express

2. american express® gold card, 3. citi strata premier℠ card, 4. capital one venture x rewards credit card, 5. capital one venture rewards credit card, 6. marriott bonvoy brilliant® american express® card, 7-11. top qantas credit cards for businesses, if you’re trying to earn qantas points.

Are you familiar with Qantas Airways? This Australian airline is a member of Oneworld alliance and maintains an increasingly rare distance-based award chart. To that end, you may want to build up your stash of Qantas Points, though finding Qantas cards isn’t as intuitive as you may think.

Let’s take a look at six different personal cards and five different business cards that earn Qantas Points.

» Learn more: The guide to Qantas Frequent Flyer

Although Qantas has a number of co-branded credit cards, these are limited to consumers in Australia. You won’t find any Qantas cards within the U.S, but that doesn’t mean earning points is difficult.

Thanks to its strong partnerships with a number of transferable point currencies , Qantas has made it simple to acquire points for reward flights.

These partnerships are especially valuable for those looking to redeem miles for flights with other Oneworld alliance members, such as Alaska Airlines and American Airlines. Both of these airlines lack transfer partnerships with any major card issuer, making their miles more difficult to obtain compared to Qantas Points.

Here are the six best cards for Qantas Points:

Our first pick for earning points is The Platinum Card® from American Express , which is a premium travel credit card with an expensive annual fee to match.

Because of this, cardholders can expect high-end travel benefits such as airport lounge access , hotel elite status and hundreds of dollars in credits each year. This includes a monthly Uber Cash credit, a Walmart Plus membership credit and a $100 Saks 5th Ave credit.

This is in addition to the following welcome offer: Earn 80,000 Membership Rewards® Points after you spend $8,000 on eligible purchases on your new Card in your first 6 months of Card Membership. Terms Apply.

American Express has 20 different hotel and airline partners to which you can transfer your Membership Rewards . This includes Qantas Airways, where you can convert your AmEx points at a 1:1 ratio, meaning one AmEx point becomes one Qantas point.

Qantas Airways charges just 30,200 points for a one-way economy class ticket from Los Angeles to Papeete, French Polynesia. You could earn nearly enough points for a round-trip ticket just by signing up for The Platinum Card® from American Express .

Terms apply.

Another contender from AmEx is the American Express® Gold Card . This mid-tier card earns four points per dollar spent on both U.S. restaurants and supermarkets, making it a very lucrative option for those who spend a lot on food.

Along with these bonus categories, you’ll also receive $10 each month in Uber Cash and $10 per month towards select dining purchases.

The card also comes with the following welcome offer: Earn 60,000 Membership Rewards® points after you spend $6,000 on eligible purchases with your new Card within the first 6 months of Card Membership. Terms Apply.

As with The Platinum Card® from American Express , you’ll be able to transfer your AmEx points over to Qantas at a 1:1 ratio.

» Learn more: The points collector’s guide to Qantas Airlines

The Citi Strata Premier℠ Card is a good option for earning Qantas Points, especially with the following signup bonus: Earn 70,000 bonus ThankYou® Points after spending $4,000 in the first 3 months of account opening, redeemable for $700 in gift cards or travel rewards at thankyou.com.

Charging a ​​ $95 annual fee, the card doesn’t come with a ton of travel benefits. However, it does earn 10 points per dollar on hotels, car rentals and attractions booked through Citi and three points per dollar spent on other hotel purchases, restaurants, supermarkets, air travel and gas stations, making Citi ThankYou points easy to accrue.

Among Citi’s 15+ hotel, airline and shopping partners is Qantas Airways. Citi points transfer over to Qantas at a 1:1 ratio.

Citi Strata Premier℠ Card holders receive double the value when they convert their ThankYou points to Choice Privileges points.

The Capital One Venture X Rewards Credit Card — Capital One’s foray into the luxury card market — charges a $395 annual fee but makes up for it with a whole host of benefits. This includes a $300 annual travel credit, a 10,000-mile anniversary bonus, airport lounge access and a Global Entry/TSA PreCheck credit.

The card is currently featuring the following welcome offer: Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel.

Capital One has 18 different hotel and airline transfer partners, including Qantas Airways. Capital One Miles transfer over to Qantas Points at a 1:1 ratio.

» Learn more: How Oneworld elite status works

Often referred to as the younger sibling of the Capital One Venture X Rewards Credit Card , the Capital One Venture Rewards Credit Card offers five miles per dollar spent on hotels and rental cars booked through Capital One travel. Otherwise, you’ll earn a flat two miles per dollar spent on every purchase.

The Capital One Venture Rewards Credit Card charges a fee of $95 annually and features the following welcome offer: Enjoy a one-time bonus of 75,000 miles once you spend $4,000 on purchases within 3 months from account opening, equal to $750 in travel.

As with the Capital One Venture X Rewards Credit Card , you can transfer miles earned with this card to Qantas Airways at a 1:1 ratio.

» Learn more: The best airline credit cards right now

Did you think you’d see a hotel credit card on this list? Believe it or not, Marriott Bonvoy points have a wide variety of airline partners to which they can transfer. This includes Qantas Airways.

The Marriott Bonvoy Brilliant® American Express® Card is another premium travel credit card, offering Marriott elite status, a $300 annual statement credit for spending at eligible restaurants, airport lounge access and an anniversary free night award to cardholders.

Along with 37 other airlines, Marriott Bonvoy points transfer over to Qantas Airways at a 3:1 ratio, meaning three Marriott points become one Qantas point.

However, Marriott will also throw in a 5,000 mile bonus when you transfer 60,000 points to an airline. This means that if you transfer 60,000 Marriott points you’ll end up with a total of 25,000 airline miles.

» Learn more: Oneworld alliance award sweet spots and transfers partners

If you're in the market for a business card, here are five credit cards issued by the same banks as the cards listed above that also allow you to transfer points to Qantas.

on American Express' website

$0 intro for the first year, then $95 .

• 5 points per $1 on flights and prepaid hotels booked American Express Travel.

• 1.5 points per $1 in key business categories and eligible purchases of $5,000 or more (on up to $2,000,000 in purchases per year).

• 1 point per $1 on other eligible purchases.

• 4 points per $1 on your top two business categories (on up to $150,000 in purchases per year).

• 3 points per $1 on flights and prepaid hotels booked American Express Travel.

• 10 miles per $1 on hotels and rental cars through Capital One Travel.

• 5 miles per $1 on flights through Capital One Travel.

• 2 miles per $1 on everything else.

• 5 miles per $1 on hotels and rental cars through Capital One Travel.

• 6 points per $1 at participating Marriott Bonvoy hotels.

• 4 points per $1 on worldwide dining, U.S. gas stations, on wireless telephone services purchased directly from U.S. service providers and on U.S. purchases for shipping.

• 2 points per $1 on all other eligible purchases.

Four of the cards allow point transfer to Qantas at a 1:1 ratio. However, the Marriott Bonvoy Business® American Express® Card has the same 3:1 transfer ratio as the Marriott Bonvoy Brilliant® American Express® Card discussed above.

» Learn more: Best business travel credit cards

Those looking to redeem Qantas points can take advantage of its Oneworld membership to book flights with airlines such as Alaska, American, British Airways and Japan Airlines, making these a valuable and easy-to-use currency.

Although Qantas doesn’t offer any of its own co-branded credit cards within the U.S., that doesn’t mean its points are hard to earn. This is thanks to its variety of transfer partnerships, including American Express, Citi, Capital One and Marriott.

How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are some of the best travel credit cards of 2024 :

Flexibility, point transfers and a large bonus: Chase Sapphire Preferred® Card

No annual fee: Bank of America® Travel Rewards credit card

Flat-rate travel rewards: Capital One Venture Rewards Credit Card

Bonus travel rewards and high-end perks: Chase Sapphire Reserve®

Luxury perks: The Platinum Card® from American Express

Business travelers: Ink Business Preferred® Credit Card

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Why are ASX investors so excited by the Qantas share price?

Investors' sentiment is positive on the airliner.

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Qantas Airways Ltd ( ASX: QAN ) has captured the attention of ASX investors as its share price has rallied more than 14% this year to date.

It closed the session slightly in the red yesterday at $6.11 apiece, not too far from its 52-week closing high of $6.30 in May.

Brokers are also bullish on the Qantas share price, with the consensus rating it a strong buy, according to CommSec. There are no sell ratings on the stock.

So, what's driving this excitement? Let's dive in.

Why is the Qantas share price soaring?

There have been numerous catalysts thrusting the Qantas share price higher in recent weeks. Goldman Sachs placed a buy rating on the airliner in a June note, with a price target of $8.05.

This target suggests a potential upside of over 31% from today's share price. For context, if you invested $20,000 in Qantas shares today, and the broker's projections are correct, the investment could grow to around $26,220.

It's hard to ignore the investor sentiment either. The airliner was valued at $5.08 apiece just 3 months ago.

Experts say that Qantas' potential earnings growth has improved compared to pre-COVID levels, yet this isn't reflected in its current valuation.

For instance, Goldman Sachs notes that its FY 2024/2025 profit before tax (PBT) projections are 51% and 61% ahead of pre-COVID levels, respectively. This in itself may be one driver.

But, at the same time, the Qantas share price is also trading at a price-to-earnings (P/E) ratio of 6.7, much lower than the average P/E of 9.1 for its regional and US peers, Goldman says. It is also far lower than the iShares Core S&P/ASX 200 ETF ( ASX: IOZ ) P/E of 18.4. This ETF tracks the benchmark index.

Despite this 63% discount to the benchmark ETF, its earnings projections for the next two years are far ahead of FY 2019. To me, it remains attractively valued.

This suggests that the market has yet to fully recognise Qantas' growth potential and might indicate that the share price is undervalued.

Promising future for Qantas

On Wednesday, the company announced it was buying the remaining 49% stake in online travel player TrpADeal.

For the stake, it paid $211 million. It had acquired the other 51% of the business two years ago. The rationale, it says, is to "deepen synergies". It says the deal could provide up to $50 million in annual cost synergies, whilst expanding the airline's customer network.

In my view, a positive outlook from management – especially regarding dividends – could further lift the Qantas share price.

The airline has announced an increase in its on-market share buyback by up to $400 million. On top of this, over FY 2025-2027, Goldman expects total capital returns of $1.6 billion, including $1.2 billion in dividends.

If Qantas hits the projected EPS of 96 cents in FY 2025 and the P/E ratio increases to match its peers, the share price could reach above $8 per share in my view.

Given the combination of operational efficiency, strong earnings forecasts, and dividend potential, the Qantas share price looks set for a bright future. Broker estimates support that Qantas shares could end FY 2025 above $8.

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Help and Support

Taxes and charges not collected on the ticket, 25/11/2020 • knowledge, information.

Are there any other taxes or charges that I have to pay when I travel?

The taxes and charges included in the cost of your ticket are those that are required to be collected on the ticket by the authorities of the countries you are travelling to. Some countries impose taxes that are not collected on the ticket, such as an airport tax, and are required to be paid locally.

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