Legendary investor Warren Buffett famously refuses to invest in airlines. This aversion to airlines came about after the Oracle of Omaha’s investment in USAir Group in 1989 turned sour leaving his pockets lighter by around US$350 million.

He’s not alone in this view with many investors feeling the same way. Personally I believe airlines can be good trades, but they have to be treated very differently.

If I made a buy and hold investment in leading private hospital operator Ramsay Health Care Limited (ASX: RHC) I would expect to not have to touch those shares for perhaps as much as a decade.

Whereas an investment in Qantas Airways Limited (ASX: QAN) or Virgin Australia Holdings Ltd (ASX: VAH) is one which I would be constantly monitoring. Investors needs to consider how ever-changing factors such as oil prices, economic conditions, geopolitical risks, and competition will affect an airline’s results.

With that in mind, is now a good time to invest in Qantas? According to Morgan Stanley it is. A research note out of the investment bank reveals that its analysts believe the industry is very attractive at present and that Qantas’ domestic business is being undervalued by the market.

Its analysts have reiterated their $4.30 price target on Qantas’ shares and given it an overweight rating. This price target implies potential upside of a whopping 34% at the current share price.

After a slight decline in its share price in the last month I’m starting to like Qantas as an investment. With oil prices remaining low and in my opinion unlikely to climb far beyond US$50 a barrel for some time to come, the margin-expanding savings it has been making on fuel costs should continue to support profit growth.

Furthermore I expect the airline to benefit from the boom in international tourism. Especially from the China market. Inbound tourism from that market is expected to continue to grow significantly over the next few years.

Overall I would agree that Qantas is a good investment at the current price. But it would be prudent to keep a close eye on the oil price. If fuel costs start to rise, profitability will be challenged and the share price could decline as a result.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. 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.