Qantas Airways Limited (ASX: QAN) has seen its share price lose 30% of its value in the past few months as the airline faces a number of headwinds.

Oil prices had been rising and are a major cost (see below), international competition has intensified, and weaker than expected demand both internationally and domestically are all buffeting the airline.

From a share price of over $4.00 in April, shares are currently trading at around $3.00, having hit a low of $2.58 last month.

The following chart shows how Qantas has turned around the earnings before interest and tax (EBIT) of its 3 big divisions: Domestic, International and Jetstar over the past 18 months.

Where Qantas makes its money

Source: Company report

 

This chart shows where Qantas spends its revenues and shows how the falling oil price has translated into big savings.

Where Qantas spends its money

Source: Company report

 

After generating an underlying profit after tax of $921 million in the first six months of the 2016 financial year from revenues of $8.5 billion, Qantas is on track to resume paying dividends either later this year or early next year.

Foolish takeaway

The rapid rise and subsequent fall in the Qantas share price shows how exposed the airline is to external factors that can impact on its business. It’s one reason why Warren Buffett dislikes the sector so much, and why I won’t be investing in Qantas shares anytime soon.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.