Is this why Qantas shares are racing ahead of the ASX 200 on Tuesday?

Investors are bidding up the Qantas share price today. But why?

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Qantas Airways Ltd (ASX: QAN) shares are racing ahead of the benchmark today.

Shares in the S&P/ASX 200 Index (ASX: XJO) airline stock closed yesterday trading for $6.07. In early afternoon trade on Tuesday, shares are swapping hands for $6.22 apiece, up 2.5%.

For some context, the ASX 200 is down 0.3% at this same time.

Here's what's happening.

ASX 200 airline flying high amid resurgent travel

Without any fresh price sensitive news today, it looks like Qantas shares could be catching some tailwinds from the latest 'Domestic Airline Competition in Australia' report.

The report, released by the Australian Competition & Consumer Commission (ACCC) earlier today, revealed that the Australian aviation sector appears to have fully recovered from the COVID-19 pandemic.

As you likely recall, pandemic travel restrictions saw Qantas shares collapse by 63% in early 2020. The ASX 200 airline stock has soared 168% since those March 2020 lows.

Today the ACCC revealed that Australia's major airlines (Bonza, Jetstar, Qantas, Rex and Virgin Australia) carried 4.9 million domestic passengers in March. This is just 1.2% below the same air travel numbers from March 2019.

The report also noted that Australia's major airlines flew roughly 6.2 million seats in March. This is also just below the seat capacity recorded in March 2019.

Commenting on the return to pre-pandemic air travel, ACCC commissioner Anna Brakey said, "After four years of instability, the domestic airline industry has returned to more typical seasonal levels that were last seen before the pandemic."

Brakey noted that domestic ticket prices have been trending lower:

The increase to airline seat capacity has contributed to lower airfares for consumers on domestic routes. We hope to see this trend continue as the airline industry returns to a more stable market.

Also potentially boosting Qantas shares is that March's strong travel figures come on the heels of an even stronger February report. In February, domestic passenger numbers exceeded 2019 levels for the first time since the pandemic.

The ACCC pointed to several "major entertainment events" in Australia in February that helped drive air travel demand.

"Most notably, this included Taylor Swift's concert tour in Melbourne and Sydney, as well as a World Wrestling Entertainment event in Perth," the report stated.

On the service front, the ACCC noted, "Service reliability has improved in recent months despite remaining worse than the long-term industry average."

March 2024 saw Australia's major airlines cancel 2.8% of flights. That's down from 5.0% of flights that were cancelled in December.

How have Qantas shares been tracking?

Qantas shares are down 5% since this time last year.

But the recent trend has been upwards, with the ASX 200 airline stock gaining 16% over the past six months.

Motley Fool contributor Bernd Struben 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 no position in any of the stocks mentioned. 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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