Could the Qantas saga benefit Flight Centre shares?

Would letting Qatar Airways duke it out with Qantas give this travel agent more mileage?

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The abrupt departure of Qantas Airways Limited (ASX: QAN) CEO Alan Joyce has shoved the airline back into the spotlight today. At the same time, it could give investors a reason to review Flight Centre Travel Group Ltd (ASX: FLT) shares.

Amid the Qantas CEO turbulence, the Flight Centre share price is 0.4% lower to $20.48 on Tuesday. However, it's worth noting the broader S&P/ASX 200 Index (ASX: XJO) is also 0.5% shy of yesterday's closing level.

However, as the rumblings over Qantas grow louder, could Flight Centre shares stand to benefit?

Pressure is on for a reversal

Last month, the Federal Government blocked Qatar Airways from operating an additional 28 flights across Australia. In the current climate of soaring cost of living and skyward airfares, the response from businesses and consumers has generally been negative.

Flight Centre CEO Graham 'Skroo' Turner has been exceptionally vocal about the government's decision. In an interview, Turner explained that international capacity is severely below the demand from would-be travellers.

It's no secret that Skroo has a dog in this fight. Jetsetting away on a holiday is a highly discretionary expense. If the airline industry isn't competitive, there is no incentive to lower airfare prices. In a tough economic environment, it could mean less total transaction value (TTV) processed by the travel agent — a negative for Flight Centre shares.

Recently, eToro market analyst Farhan Badami highlighted the Qatar rejection as an obstacle to Flight Centre's future growth.

However, the tides could be shifting as those opposed to the decision voice their opinion. The Regional Express Holdings Ltd (ASX: REX) deputy chair, John Sharp, spoke out against the government's call yesterday. Likewise, state Labor governments are supportive of more flights to encourage tourism.

Is the Flight Centre share price a buy?

Some analysts still believe good times could be ahead for Flight Centre shares. This view is in spite of the travel agent being the most shorted ASX share, totalling 10.4% short interest according to the latest shorting data.

One such optimistic bunch is the team at Morgans. The analysts have an add rating on Flight Centre with a target share price of $26. This would suggest a potential 27% upside on offer at the current price despite shares already climbing nearly 22% over the past year.

According to Morgans, the travel recovery still has plenty of runway in front of it. As such, the analysts say the company is 'well placed over coming years'.

Flight Centre shares trade on a price-to-earnings (P/E) ratio of roughly 95 times earnings. It seems shareholders are also factoring in a further recovery in profits still to come, considering the industry average P/E is around 35.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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