The Qantas Airways Ltd (ASX: QAN) share price has hit major turbulence on Tuesday.
In morning trade, the airline operator's shares are down 10.5% to $8.72.
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Why is the Qantas share price descending rapidly?
There are a few reasons why the Flying Kangaroo's shares are falling heavily this morning.
The first is a broad market weakness which is weighing down most ASX 200 shares on Tuesday. This has been caused by a selloff on Wall Street overnight due to US recession concerns.
In addition, a number of airline stocks tumbled sharply lower overnight in the United States such as American Airlines Group Inc (NASDAQ: AAL), Southwest Airlines Co (NYSE: LUV), Delta Air Lines Inc (NYSE: DAL), and United Airlines Holdings Inc (NASDAQ: UAL).
American Airlines was down 4% during the session and then a further 7.7% in after hours trade, whereas Delta Air Lines dropped 5.5% during the session and then continued to fall 11% after hours. It was a similar story for the other airline stocks.
This came after Delta Air Lines revised its guidance due to a decrease in consumer and corporate confidence, leading to weaker domestic demand amid heightened macroeconomic uncertainty.
What else?
Also weighing down the Qantas share price today is the fact that it is trading ex-dividend for its first payout since 2019.
When a share goes ex-dividend, it means that the rights to the dividend are settled and new buyers will not receive the payout when pay day comes around.
As a result, a share will usually drop to reflect this. After all, you don't want to pay for something you won't receive.
Qantas dividend
Last month, Qantas released its half year results and reported an 11% increase in underlying profit before tax to $1.39 billion.
This allowed the company to declare a $250 million base dividend and a $150 million special dividend. Both are fully franked and total 26.4 cents per share.
Based on where the Qantas share price ended yesterday's session, this equates to a 2.7% fully franked dividend yield. Not bad for just the interim payout.
Eligible shareholders can now look forward to receiving a pay check from Qantas next month. It is scheduled to pay the dividend on 16 April.
After which, according to a note out of Goldman Sachs, its analysts are forecasting a fully franked 16.6 cents per share final dividend in August.
Goldman currently has a buy rating and $11.80 price target on Qantas' shares.
