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Post Market Wrap | Qantas Group Climate Action Plan released

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This Post Market Wrap is presented by KOSEC – Kodari Securities

  • Targeting 25 percent reduction in greenhouse emissions by 2030
  • Sustainable Aviation Fuel can reduce greenhouse emissions by 80 percent
  • Sustainable Aviation Fuel is produced from sugar cane, forestry residues and animal tallow
  • Zero use of single-use plastics by 2027
  • Modernised fleet can burn 15 percent less fuel and improve fleet efficiency by 1.5 percent per year.
  • Sustainability reporting is good for business and explains why Qantas is one of the world’s best managed airlines.   

Qantas, founded in 1920, has been flying passengers internationally since 1935 and is today the world’s third largest airline, with seamless connections to over one hundred global destinations. As Australia’s flagship carrier, Qantas has an approximate 65 percent domestic market share, and operates in a competitive duopoly with Virgin Australia. 

Qantas Group Climate Action Plan

The Qantas Group Climate Action Plan (Plan) released today makes sustainability the basis of decision making across all areas of the business. This includes integrating climate change issues into the Group’s financial framework and linking performance against targets to executive remuneration, including factoring in a cost of carbon in financial decisions. The Plan outlines the Group’s interim targets and initiatives to achieve a 25 percent reduction in greenhouse emissions by 2030.

Sustainable Aviation Fuel (SAF) 

Qantas is driving the development of the sustainable aviation fuel industry in Australia. This initiative is aimed at taking the fuel mix of Qantas flights to 10 percent use of SAF by 2030 and to 60 percent by 2050. This initiative is critical for reaching its net zero emissions target under its market-leading carbon offsetting program. Australia already produces feedstock for SAF that is exported to overseas producers. The feedstock is produced from sugar cane, cooking oil, forestry residues, and animal tallow, before being blended with normal jet fuel. The blended fuel produces up to 80 percent less greenhouse emissions, compared to traditional jet kerosene. Qantas sees value in building a domestic bio-fuels industry, creating jobs and fuel security in Australia. To this end, Qantas has committed $50 million towards the establishment of an Australian-based SAF industry. Today, 15 percent of fuel used out of London comprises SAF and a supply deal has been signed for 20 million litres annually of blended SAF out of Californian airports from 2025.  

Waste Reduction

The airline aims to achieve zero single-use plastics by 2027 and zero general waste to landfill by 2030. This means that every Qantas flight will eventually use products in compostable or recyclable packaging. Qantas anticipate that by 2030, all of its Australian-based operations will be completely free of general waste. 

Fuel Efficiency 

A modernised fleet and more efficient flight planning can burn 15 to 20 percent less fuel and improve fleet efficiency by an average of 1.5 percent per year. Qantas is also undertaking research into hydrogen and battery power. However, it is acknowledged that hydrogen or electric powered aircraft are several decades away.  

Image: File

Carbon Offsets

The offsetting program will continue, especially into key Australian projects. Qantas has entered into a Memorandum of Understanding with ANZ and INPEX for a major reforestation and carbon farming project in Western Australia’s wheatbelt region. The Qantas Fly Carbon Neutral carbon offset program has one of the highest participation rates of any airline in the world.  

Brand Power

Qantas understands the value of a reputable consumer brand and by leading the decarbonisation of the aviation industry, it is strengthening the airline’s consumer brand power. Its proactive response to climate change is well documented in its sustainability reporting to stakeholders and this gives the airline its licence to maintain and grow over the long-term.

Qantas recognises that managing sustainability and transparently reporting this to stakeholders is fundamental to protecting brand value. It isn’t just good for the planet; it’s also good for business, and this partly explains why Qantas is one of the world’s leading and best managed airlines. 

This Post Market Wrap is presented by Kodari Securities, written by Michael Kodari, CEO at KOSEC.

"Michael Kodari is one of the world's most consistent, top performing investor. A philanthropist and one of the prominent experts of the financial markets, he has been referred to as ‘the brightest 21st century entrepreneur in wealth management' by CNBC Asia and featured on Forbes. Featured on TV as the "Money Expert", on the weekly Sunday program "Elevator Pitch", he is recognised internationally by governments as he was the guest of honour for the event "Inside China's Future", chosen by the Chinese government from the funds management industry, attended by industry leaders, when they arrived in Sydney Australia, on April 2014. Michael and George Soros were the only two financiers in the world invited and chosen by the Chinese government to provide advice, and their expertise on Chinese government asset allocation offshore. With a strong background in funds management and stockbroking, Michael has worked with some of the most successful investors and consulted to leading financial institutions. He was the youngest person ever to appear on the expert panel for Fox, Sky News Business Channel at the age of 25 where he demonstrated his skillset across a 3 year period forming the most consistent track record and getting all his predictions right over that period. Michael writes for key financial publications, is regularly interviewed by various media and conducts conferences around the world."

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Money

RBA cuts cash rate, easing pressure on homeowners

RBA cuts cash rate from 4.35% to 4.10%, marking first reduction since November 2020, benefiting struggling homeowners.

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RBA cuts cash rate from 4.35% to 4.10%, marking first reduction since November 2020, benefiting struggling homeowners.

In Short

The Reserve Bank of Australia has reduced the official cash rate from 4.35% to 4.10%, marking its first cut since November 2020 due to declining inflation. Homeowners are set to benefit, but experts warn the effects may take time to be felt.

Homeowners have awaited this decision more than a year, hoping for financial relief. The RBA stated that declining inflation justified this cut, indicating that it is beginning its rate-cutting cycle.

Due to falling inflation metrics, the Board expressed confidence that inflation rates are moving towards the target range of 2-3%. They noted that underlying inflation was recorded at 3.2% in the December quarter, suggesting pressures are easing faster than anticipated.

However, the Board also cautioned about potential upside risks, especially with recent strong labour market data, leading to uncertainties in economic activity and inflation outlooks.

Further cuts

Despite the rate reduction, the Board remains cautious about further cuts. They highlighted the need for careful assessment of inflation data, consumption growth, and global economic conditions before making new policy decisions.

Mortgage holders will benefit from the cut, with potential savings estimated at over $1,000 annually.

Market expectations indicated a high likelihood of this reduction, with forecasts suggesting more cuts in 2025 and early 2026.

Economic experts warn that it typically takes time for the impacts of rate cuts to fully materialise in the economy, suggesting homeowners may experience delayed benefits.

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Money

Interest rates impact investments, housing, and economy

Interest Rate Cuts: Implications for Borrowing, Housing Prices, and Australia’s Economy Post-COVID

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“Interest Rate Cuts: Implications for Borrowing, Housing Prices, and Australia’s Economy Post-COVID”

In Short

Interest rates in the US and Australia are under scrutiny as the impact of COVID-19 fades, raising concerns about investments and borrowing capacity. Experts are debating the long-term effects of Australia’s recent rate cut on housing prices and the cost of living crisis.

This development raises questions about its implications for investments, repayments, and savings.

To discuss these issues, we have Andrew Woodward from the Investor’s Way.

The rate cut has raised concerns about its impact on Australians’ borrowing capacity and the potential for rising housing prices.

There is also speculation about how this rate cut could affect the ongoing cost of living crisis in Australia. Experts are considering the possible long-term consequences of this reduction on Australia’s economy.

Many are asking whether this signals the start of a series of rate cuts by the Reserve Bank of Australia.

It’s important to examine how this shift in Australia’s monetary policy aligns with broader global economic trends.

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Money

Hainan’s hidden paradise is transforming the global economy

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Once a quiet island, now a booming gateway—how Hainan is becoming a powerhouse of trade, innovation, and opportunity

The Big Picture unveils the incredible story behind China’s newest economic powerhouse. Host Mark Llewellyn explores a tropical island that has been transformed into a thriving hub for Australian and international businesses. As part of the Fortune Bay economic zone, this region is poised to drive China’s economy—and global growth—over the next decade. With ambitious plans in place, the opportunities for innovative and successful Australian businesses could be immense.

In this episode, discover China’s best-kept secret, where the rapidly evolving, visa-free, and largely tax-free island of Hainan is unveiled to the world for the first time. With its booming economy and vast untapped potential, Hainan presents a golden opportunity for Australian businesses looking to break into the world’s largest market. Journey through breathtaking landscapes, meet visionary leaders, and explore bold innovations shaping this emerging economic powerhouse—one poised to drive global growth for the next decade.

 

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