Qantas Airways (ASX: QAN) shares closed 2% lower on Tuesday afternoon, at $9.21 a piece.
The airline has faced significant headwinds so far in 2026 as conflict in the Middle East and rising fuel prices put airlines under pressure. The shares are now down 12% for the year-to-date and 14% lower than a year ago.
The airline's shares might be tumbling, but I think now is a great time for investors to snap up the shares for cheap. Here's why.
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5 reasons to buy Qantas shares
1. It is a dominant airline stock
The aviation heavyweight has dominated the Australian domestic aviation market for decades. The company currently has a duopoly in the market alongside rival Virgin Australia Holdings Ltd (ASX: VGN). Together the two companies control around 99% of Australia's aviation market. However, Qantas' share of the domestic market currently accounts for around 60%, and it's still growing.
2. Its fuel exposure are hedged in H2 FY26
Tensions in the Middle East are ongoing and each time it looks like the US and Iran are about to reach a peace agreement, something shifts. The uncertainty continues to severely restrict the supply of oil out of the region, and given jet fuel is Qantas' largest operating expense, it could affect the company's earnings. But the good news is that Qantas is working effectively to minimise costs. The company said that around 90% of its second-half fuel exposure is already hedged. Its plan to increase fares and make some route changes will also help to recover part of the fuel price pressure.
3. Travel demand is stronger than expected
Despite cost-of-living pressures and higher airfares, demand for domestic, international, and corporate travel remains high. In fact, in April, Qantas significantly upgraded its second-half FY26 revenue guidance off the back of strong demand and capacity shifts despite higher fuel costs. The airline said its international and domestic unit revenues are currently running ahead of expectations.
4. It pays shareholders a passive income
Qantas resumed its twice-yearly payment dividends to shareholders in April 2025. The airline previously paused its dividend payments in 2019 when the Covid-19 pandemic forced the airline to halt payouts and conserve cash. Qantas most recently paid its shareholders a 19.8 cents per share interim dividend, fully franked, in March. The business is forecast to pay an annual dividend per share of 39.6 cents per share. At the time of writing, that translates into a forecast grossed-up dividend yield of around 4.3%, including franking credits.
5. Analysts tip a strong upside ahead
TradingView data shows that the majority of analysts (13 out of 14) have a buy or strong buy rating on Qantas shares. They tip a 20% upside to an average $11.01 target price, or a 40% upside to a maximum $12.80 target price.
