The Qantas Airways Limited (ASX: QAN) share price returned to form in April and was among the best performers on the S&P/ASX 200 Index (ASX: XJO).
The airline operator's shares ended the month with a gain of almost 20%.
Why did the Qantas share price storm higher in April?
After a month to forget in March, investors were snapping up the company's shares in April.
Investor sentiment in the travel industry improved greatly after Australia's social distancing measures flattened the coronavirus curve and put the country on a path to beating the virus sooner rather than later.
Beating the virus would be good news for the travel industry and could mean that domestic travel resumes in the coming months.
Will Qantas be okay for a few more months?
Given how Qantas struck a deal for a total of $1.05 billion of additional liquidity at the end of March, as long as there is no second coronavirus wave, the company's balance sheet looks strong enough to navigate this current crisis.
It may even come out of the crisis in a stronger position if other airlines are not as fortunate. There are concerns that Virgin Australia Holdings Ltd (ASX: VAH) may struggle to find a buyer and could go bust. This would lessen competition greatly in the domestic market, at least temporarily, and allow Qantas to cement its market leader position.
Another positive for Qantas is the collapse in oil prices. Oil prices even went negative last month amid concerns that there was nowhere to store upcoming deliveries. Given the global supply glut, it seems inevitable that prices will remain lower for longer.
This should put Qantas in a good position to benefit from lower fuel costs once its planes are in the sky again.
Is it too late to invest?
While it remains a high risk option due to the unknowns of the pandemic, I think if the crisis passes in the coming months then Qantas' shares could prove to be good value at the current level.
One broker that sees value in them is UBS. In the middle of last month it slapped a buy rating and $4.65 price target on its shares. This price target implies potential upside of 20% over the next 12 months.
