Qantas Airways (ASX: QAN) shares have been in focus again as Project Sunrise edges closer to reality.
The airline recently unveiled its first purpose-built Airbus A350-1000ULR in Toulouse, France.
Non-stop flights from Sydney to London are now locked in for October 2027, with tickets going on sale from February 2027.
A Sydney to New York route will follow, though a launch date has not yet been confirmed.
Image source: Getty Images
What is the new aircraft?
The new aircraft will carry just 238 passengers, well down on the 410 seats found on a standard A350. This will make room for extra fuel tanks and a dedicated wellbeing zone.
Qantas has ordered 12 of the ultra-long-range jets in total.
Management says the intent to book a Project Sunrise flight has climbed sharply among premium leisure travellers since February 2026.
This is a promising signal for a product built around high-margin cabins.
So where does that leave Qantas shares?
Qantas shares are trading on a price to earnings ratio of around 10 times, below the global airline industry average of roughly 9 to 12 times depending on the peer set used.
The stock carries a dividend yield near 3.5%, with the payout covered by earnings.
Analyst sentiment remains firmly positive.
Multiple brokers rate Qantas a buy or outperform, with average 12-month price targets clustering between roughly $11 and $12.
That implies modest to solid upside from current levels, though estimates vary depending on each analyst's fuel and demand assumptions.
The bull and bear case for Qantas shares
The bull case rests on Qantas converting its domestic duopoly position, its loyalty program, and Project Sunrise into durable earnings growth over the next several years.
The bear case is the one that has dogged all airlines recently.
Fuel costs have risen sharply on the back of the conflict involving Iran, and Qantas has flagged higher near-term jet fuel bills as a result.
Airlines are also inherently cyclical, and a downturn in travel demand can hit margins quickly.
Project Sunrise itself has already been delayed roughly six months from its original schedule, a reminder that execution risk on a genuinely novel aircraft program is real.
For investors comfortable with cyclical risk, Qantas offers a rare combination of a reasonable valuation, a growing loyalty and freight business, and a marquee growth catalyst in Project Sunrise that could open a new premium revenue stream from 2027.
For more conservative investors, the fuel cost backdrop and the airline's history of guidance resets are worth weighing carefully before buying.
Foolish Takeaway
Project Sunrise gives Qantas a new growth catalyst heading into 2027.
The shares still trade at an undemanding multiple relative to the broader airline sector.
But investors should size any position with the industry's fuel and demand cyclicality firmly in mind.
