Qantas Airways Ltd (ASX: QAN) shares are trading under $10, and I think they look attractive at that level.
Airline stocks can be volatile. Fuel prices, travel demand, competition, economic conditions, and aircraft availability can all move earnings around quickly.
But I think Qantas has enough going for it to make the shares worth buying for patient investors. Here are three reasons why.
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The valuation looks reasonable
The first reason is valuation.
According to CommSec, the consensus estimate is for Qantas to generate earnings per share of 98.4 cents in FY26, $1.16 in FY27, and $1.15 in FY28.
With Qantas shares trading below $10, that puts the stock on less than 10 times FY26 earnings and around 8 times FY27 earnings.
That does not look demanding to me, especially for a business with Qantas' market position.
Of course, those estimates are not guaranteed. Airlines can be affected quickly by higher fuel costs, weaker demand, or disruption across global travel markets. Qantas' recent market update highlighted just how much fuel volatility can change the operating backdrop.
But I think the valuation already gives investors a reasonable buffer for some of that uncertainty.
The dividends are back
The second reason is income.
Qantas paused dividends for several years around the pandemic, which was understandable given the pressure on the aviation industry at the time.
But the airline is now back to paying dividends, and that changes the investment case.
CommSec's consensus estimates suggest Qantas could pay dividends per share of 39.6 cents in FY26, 44.8 cents in FY27, and 56.2 cents in FY28.
Based on a share price under $10, that implies forward dividend yields of around 4% in FY26, 4.5% in FY27, and more than 5.5% in FY28.
That income stream could become increasingly appealing if earnings remain resilient.
I would not treat Qantas like a classic defensive dividend share. Airline dividends can move with the cycle. But I do think the return of dividends shows how far the business has come since the pandemic years.
The business has real strengths
The third reason is that Qantas is not just any airline.
It has a powerful position in Australian aviation, supported by the Qantas and Jetstar brands. That gives it exposure to different parts of the market, from premium corporate and leisure travel to value-focused flying.
I also like the Qantas Loyalty business. It gives the group a valuable earnings stream that is not simply about selling seats on planes. Frequent Flyer, partnerships, financial products, and customer engagement all add to the broader ecosystem.
Fleet renewal is another important part of the story. New aircraft can improve customer experience, increase efficiency, and help the group better match capacity to demand over time.
There are risks to consider. Fuel prices remain a major swing factor, and Qantas has recently taken steps such as network changes, capacity adjustments, and fare increases in response to the conflict in the Middle East. Higher costs can still affect customers and margins if conditions remain difficult.
But I think Qantas has the scale, brands, loyalty business, and financial discipline to manage through a tougher environment better than many smaller airlines.
Foolish takeaway
Qantas shares under $10 look appealing to me.
The stock is trading on a modest earnings multiple based on consensus forecasts, dividends are back, and the business still has a strong position in Australian travel.
I would not expect the ride to be smooth. Airline stocks rarely are. But for investors who can handle some turbulence, I think Qantas offers an attractive mix of value, income potential, and recovery strength at current levels.
