The Qantas Airways Limited (ASX: QAN) share price has been a strong performer in November.
Since the start of the month, the airline operator's shares have gained an impressive 32%.
Can the Qantas share price go higher from here?
One leading broker that believes there are still more gains ahead for the Qantas share price is Goldman Sachs.
According to a note out of the investment bank, its analysts have just reiterated their buy rating and $6.99 price target on its shares.
This price target implies potential upside of 26.5% for the Qantas share price over the next 12 months.
Why is Goldman bullish on Qantas?
Goldman Sachs has previously highlighted that the risks to a domestic market reopening were diminishing and that it had become more confident in a reopening pre-Christmas.
Last week there has been major progress on this front with the NSW-Victoria border reopening on 23 November, and the Queensland government announcing that it would re-open to NSW and Victoria from 1 December.
Its analysts feel this is great news for airlines and particularly for Qantas. This is because rival Virgin Australia has closed its Tiger brand and is committed to retaining a third of the domestic market capacity share. This is down from ~40% pre-COVID, including the Tiger brand.
The broker believes this gives "breathing space for Qantas to gain market share as domestic market re-opens."
It commented: "The full scale reopening of the east coast states marks a major advance in the Australian aviation market recovery. Movements between NSW, Victoria and Queensland represent c.80% of total air travel, so the opening of these borders was necessary to facilitate a material recovery of the domestic market. As indicated the airlines have moved rapidly to schedule additional capacity and launch renewed marketing campaigns."
"The key takeaway from the most recent Virgin Australia commentary is the latest confirmation that it will retreat to its previous market position as a mid-market carrier, targeting SME's and premium leisure travelers," it added.
Goldman Sachs sees this as a big win for Qantas and its Jetstar brand, essentially handing it full control of some key markets.
Goldman said: "The plan effectively hands back to Qantas full control of the high-end corporate and premium markets, and to Jetstar the low-cost, price sensitive leisure end of the market."
This is positive for three reasons.
"With limited competition at these ends of the market during the early phase of the recovery we believe QAN will be well-placed to: (i) manage available capacity to meet demand, (ii) set ticket pricing; and (iii) apply appropriate discounting, to ensure profitable utilisation," it explained.
At present, Goldman Sachs is forecasting a 50% recovery in domestic travel by Christmas. Though, it acknowledges that there is upside risk to its forecasts given the pent up demand.
