The Qantas Airways Ltd (ASX: QAN) share price is slipping today, down 1.3% in early afternoon trade.
But the S&P/ASX 200 Index (ASX: XJO) airline stock remains a strong outperformer over the past year.
Amid resurgent domestic and international travel demand, the Qantas share price has marched steadily higher over the past nine months, up an impressive 55% since the closing bell on 12 July.
At the current $6.56 per share, the airline is trading right about where it was before the stock (and most every share on the ASX) crashed in February 2020 when the global pandemic brought the world to a virtual halt.
But is the Qantas share price now vulnerable to a large retrace?
Headwinds ahead?
According to a report by Bloomberg, short interest in United States' listed airlines has reached its highest level since March 2020, during the height of the pandemic fears.
Short interest in the US Global Jets ETF (NYSEARCA: JETS) has reached more than 10% of the ETF's float.
"Airlines trade at a low multiple but are extremely highly leveraged and there are serious risks on the horizon," Michael O'Rourke, chief market strategist at JonesTrading said.
Those risks include the potential of a recession in the US and indeed across much of the globe. Even if Australia manages to dodge that recession, a global economic downturn could certainly impact the Qantas share price as well.
Investors are also concerned about high jet fuel costs, especially after the recent, unexpected crude oil production cuts from OPEC+. And then there's the rocketing cost of airline tickets that could erode the resurgent travel demand we've been seeing. Particularly as consumers struggle with high inflation and interest rates.
"That, in combination with rising recession risk has some investors willing to bet against the group believing there are multiple situational outcomes where airlines can lose," O'Rourke added.
Despite the past nine months of big gains for the Qantas share price, short interest in the ASX 200 airline remains well below that of the US Global Jets ETF.
According to ASIC's short position data for today, 1% of the airline's stock is currently held short.
And with Qantas continuing to report increased travel figures, the flying kangaroo may yet escape any turbulence hitting its US counterparts.
Qantas share price snapshot
As you can see on the chart below, the Qantas share price has gained 29% over the past 12 months. For some context, the ASX 200 is down 1% over that same period.
