Qantas Airways Ltd (ASX: QAN) shares are lifting off today.
Shares in the S&P/ASX 200 Index (ASX: XJO) airline stock closed Friday trading for $9.02. In afternoon trade on Monday, shares are changing hands for $9.22 apiece, up 2.2%.
For some context, the ASX 200 is down 0.1% at this same time.
Today's outperformance is par for the course over this past year. Qantas shares have soared 71.2% in 12 months, racing ahead of the 1.4% gains posted by the benchmark index over this same period.
Sweetening the deal, Qantas declared its first dividend for the first time since 2019 when the airline reported its half-year results on 27 February.
Still, the past two weeks have seen shares in the Flying Kangaroo hit some headwinds.
On 4 March, the airline's shares hit a new all-time closing high of $10.20, having soared above the pre-pandemic highs of $7.35 a share notched in December 2019.
Which brings us back to our headline question.
Can Qantas shares rebound to $10 or more per share in 2025?
What's been lifting Qantas shares?
To get a better idea of what may lie ahead, we'll first take a quick look at what's been going right for Qantas.
As you're likely aware, Qantas has been working to improve its on-time performance and customer service, with significant successes. The company also settled a number of legal actions in 2024, after CEO Vanessa Hudson took over from Alan Joyce in September 2023.
But with competition from Virgin Australia, potentially bolstered by its partnership with Qatar Airways, likely to increase in the year ahead, can Qantas shares keep flying ahead of the pack?
Investing for ongoing earnings growth
For the six months ending 31 December, Qantas reported a 9% year-on-year increase in total revenue to $12.13 billion. The company's net profit was up 6% to $923 million.
And, as Bloomberg reports, Hudson said that ongoing demand for both budget and luxury air travel (including non-stop flights from Perth to London) coupled with Qantas' multi-billion-dollar investments in new efficient aircraft, will keep driving Qantas shares further.
"Earnings growth comes from investment, and we are making the right investments," Hudson said last week. "We'll continue to see earnings grow."
But she acknowledged that there's always more work to be done.
According to Hudson:
I don't think that you can say the hard yards are all behind us and it's easy sailing going forward. You should always be feeling uncomfortable about what's around the corner.
Commenting on Qantas' new aircraft investments, Jakob Cakarnis, an analyst at Jarden Australia, said, "It's a delicate needle to thread. There's still room to improve and we're starting to see evidence that the investment in the fleet is worthwhile."
As for the potential benefits of more fuel-efficient airplanes to boost Qantas shares back above $10, in FY 2024, Qantas reported fuel costs of $5.32 billion. That represented more than 42% of the company's other operating expenses combined.
Atop the more efficient planes, Qantas could also benefit from forecasts of sharply lower fuel prices.
Brent crude is currently trading for US$72 per barrel, down from US$87 per barrel a year ago.
But with global supply growth expected to outpace demand growth, Citi is forecasting that the Brent crude oil price will fall to US$60 per barrel by the end of 2025.
And the broker noted that the oil price could tumble all the way to US$50 per barrel, which would offer significant cost savings to fuel-intensive companies like Qantas.
