The Qantas Airways Limited (ASX: QAN) share price has been a well-known victim of the stock market crash we've endured in 2020 as a result of the coronavirus.
Qantas shares started 2020 soaring at $7.16 after reaching as high as $7.46 a few weeks prior – an all-time high. But that was 4 months and a lifetime ago.
Today, Qantas shares are asking just $3.59, which represents a capital loss on the value of the business of 50%.
But a month ago, the situation seemed far direr. Qantas shares hit $2.03 on 19 March, meaning anyone who bought in at these lows would be sitting very comfortably on a 76.85% gain right now.
But now that Qantas has seemingly stuck the landing, can Qantas shares redeem themselves further in this difficult time and really take off?
Can Qantas reach its old altitude?
So let's be frank. The short-term outlook for this famous Australian business is not good. International travel to and from Australia is banned for most intents and purposes and there are very limited domestic flights in operation right now. Most of Qantas' fleet of aircraft remain grounded.
The government has also said that the resumption of travel will be the last thing to be reopened in this fight against the coronavirus as well.
So are there any upsides for an investment case today?
Well, there's the implicit guarantee of Qantas by the government for one. Qantas and competitor Virgin Australia Holdings Ltd (ASX: VAH) have already received substantial aid packages from the Federal Government in recognition of the vital role the airline industry takes on in our economy. These were given without 'strings' such as government ownership or share dilutions.
But Qantas is by no means out of the woods yet, and I'm not convinced that the company won't be requiring even more funding from the government to stay afloat in 2020 or beyond. If the economy is still in lockdown in June, then Qantas is probably looking at a 2021 start to resume anything close to full operation. And this is not a company with a small cost base.
Any further assistance from the government might come with some strings, which could include watering down existing shareholders' ownership of the company.
Foolish takeaway
Although I think Qantas has stepped back from the brink for now, I'm not interested in an investment myself. There is too much uncertainty and risk of share dilution for me to make an informed decision on the value of this business. Qantas can still call Australia home, but not my portfolio!
