Qantas Airways Ltd (ASX: QAN) shares are lifting off today.
Shares in the S&P/ASX 200 Index (ASX: XJO) airline stock closed yesterday trading at $8.34. In late morning trade on Wednesday, shares are swapping hands for $8.56 apiece, up 2.6%.
For some context, the ASX 200 is up 1.3% at this same time.
While today's outperformance is welcome, the airline stock has materially underperformed since the onset of the Iran war at the end of February.
Pressured by the resultant surge in oil prices and potential global travel disruptions, Qantas shares have slumped by 14% since market close on 27 February, trailing the 7.8% loss posted by the benchmark index over this same period.
Though it's worth noting that Qantas traded ex-dividend on 10 March. While the airline won't pay the fully franked interim dividend of 19.8 cents per share until 15 April, that passive income payout will go to investors who held the stock at market close on 9 March.
Qantas trades on a fully franked 5.4% trailing dividend yield.
With this picture in mind, we return to our headline question.
Image source: Getty Images
Should you buy the dip in Qantas shares?
DP Wealth Advisory's Andrew Wielandt recently analysed the outlook for the ASX 200 airline stock (courtesy of The Bull).
"Qantas is a well-managed domestic and international airline, holding a 70% market share in Australia," Wielandt noted.
Addressing the recent selling pressure, he said, "The shares were trading at $10.65 on February 25, a day prior to the company posting its first half year result in fiscal year 2026. The stock was trading at $8.46 on March 19."
And on a positive note, the company is working through the last of its pandemic related headaches.
"Qantas announced on March 13, 2026 that it had settled a class action for $105 million regarding flight credits during COVID-19," Wielandt said.
However, Wielandt issued a sell recommendation on Qantas shares, flagging a number of potential headwinds.
According to Wielandt:
The company has hedged jet fuel supply prices in the shorter term, but I'm concerned about the impact of possibly higher crude oil prices over the longer term. I'm also mindful of the expense involved in Qantas upgrading its airline fleet after years of under investment by previous management as well as COVID-19.
On 26 February, prior to the onset of the Middle East conflict, Qantas said it expected its jet fuel costs for H2 FY 2026 to be approximately $2.5 billion, inclusive of hedging and carbon costs.
But it's not just variable costs that have Wielandt concerned over further pressure on Qantas shares.
He concluded, "Qantas has a high fixed cost base. In my view, it's a cyclical stock due to its reliance on consumer and business sentiment. Other stocks appeal more at this point."
