Why I think now is a great time to buy Qantas shares for long-term passive income

Qantas shares are now trading on a fully franked dividend yield of 5.5%.

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When Qantas Airways Ltd (ASX: QAN) shares recommenced paying dividends in 2025, passive income investors took notice.

As you may recall, Qantas suspended its coveted twice-yearly dividend payouts in 2020. That came after Covid restrictions shut down most all air travel and saw Qantas' profits turn to losses.

But as domestic and international travel demand came roaring back, Qantas paid its first interim dividend in six years in April 2025.

And passive income investors will have received (or shortly will receive) two more fully franked dividends since then.

Now, here's why I think today could be an opportune time for long-term investors to buy Qantas shares for those future dividends.

A little boy in flying goggles and wings rides high on his mum's back with blue skies above.

Image source: Getty Images

Should you buy the dip in Qantas shares for passive income?

Following a very strong run in 2024 and through much of 2025, shares in the S&P/ASX 200 Index (ASX: XJO) airline stock have come under selling pressure after hitting an all-time closing high of $12.12 on 28 August.

Over the past month, Qantas shares have dropped 21%, closing on Friday trading for $8.42 each. Which, as we'll look at below, could make the airline a compelling long-term passive income investment today.

Most of the past month's share price losses have come since the onset of the war in Iran.

Atop the medium-term uncertainty surrounding a number of international travel routes and destinations, investors have also been favouring their sell buttons over concerns about mounting fuel costs.

To give you an idea of just how much jet fuel sets the airline back, at its recent half year results (H2 FY 2026), Qantas said it expected fuel costs for the six months to be approximately $2.5 billion, inclusive of hedging and carbon costs.

While the airline has hedging in place, as those contracts expire, Qantas shares will be more directly exposed to surging fuel costs. Since the commencement of the Middle East conflict, the Brent crude oil price is up 47%. Brent crude oil was trading for US$106.38 per barrel on Friday, according to data from Bloomberg.

But here's the thing.

At some point, hopefully sooner than later, the conflict with Iran will be resolved. And when oil and gas again flow freely from the Middle East, fuel prices will come back down.

When they do, there's a good chance that the Qantas share price will rebound. And the dividend yield that passive income investors receive after the share price rises will be lower than what investors receive who buy in at the lows.

What kind of dividend yield does the ASX 200 airline pay?

Over the past 12 months, Qantas has declared two fully franked dividends totalling 46.2 cents a share.

The airline will pay its interim dividend of 19.8 cents per share on 15 April. But it's a bit too late to bank that passive income payout as Qantas shares traded ex-dividend on 10 March.

At Friday's closing price of $8.42 a share, Qantas trades on a fully franked trailing dividend yield of 5.5%.

Investors who bought at the August highs, however, will only be earning a trailing yield of 3.8%.

Which is why I think that buying the recent share price dip now should pay off handsomely over the long-term.

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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