The Qantas Airways Ltd (ASX: QAN) share price closed up 1.59% yesterday.
Shares in the S&P/ASX 200 Index (ASX: XJO) airline finished off Monday trading for $7.03 apiece. That's up more than 31% so far in 2024.
Following that sharp rally, you'd now have to go back to January 2020, shortly before the onset of the global pandemic, to find the Qantas share price trading at a higher level.
But can shares in the flying kangaroo maintain this lofty altitude?
Has the Qantas share price flown too close to the sun?
In the 2024 financial year (FY 2024), Qantas reported a 10.7% increase in revenue to $21.9 billion, while underlying profit before tax declined by 16% year on year to $2.08 billion.
Those results were released on 29 August, and the Qantas share price has soared 10% since then.
But the ASX 200 airline could face some headwinds amid increasing international competition.
Air India is the latest airline that could take a bite out of Qantas' international business.
As The Australian Financial Review notes, Air India CEO Campbell Wilson aims to provide two daily flights to Sydney and Melbourne and expand into other Aussie cities as the airline invests heavily in new aircraft.
Wilson said once Air India's new and upgraded planes were in service, the airline should be able to build its market share in Australia. As you'd expect, this could potentially drag on the Qantas share price.
"It's usually much more convenient for someone to fly with the country-of-origin airline, whether it's for food or for language or just for simple convenience," Wilson said.
"We think that we will be able to attract a different market segment than has been the case in the past, and we'll be able to compete with anyone on that basis," he added.
What are the experts saying?
Auburn Capital Wealth Management's Jabin Hallihan said last week that he saw the Qantas share price as "marginally overvalued" (courtesy of The Bull).
However, he has a 'hold' recommendation on the ASX 200 airline, noting that its shares "are worth holding for potential growth in the long term".
Hallihan noted, "Pent-up travel demand following the pandemic has waned amid fierce competition. Despite challenges in the leisure market, Qantas retains strong market share among business travellers."
Following on Qantas' FY 2024 results announcement that included investments in new aircraft and customer loyalty programs, Josh Gilbert, market analyst at eToro, said:
In the short term, shares are likely to feel the impact of the focus on rebuilding trust, but it feels like a crucial decision to build for the future.
Investors should see its spending on new customer initiatives and its shiny new fleet as a runway for growth and that its increased spend is quite simply a necessity.
And Gilbert expects some volatility from the Qantas share price into 2025.
According to Gilbert:
Its journey in the next year will certainly be a turbulent one; managing ongoing ACCC investigations, continuing to repair its damaged reputation and navigating increased spending.
It won't be a one-way flight to success, but it feels like Qantas' is making the right moves at the right times to get back to its best.
