When Richard Branson, the wealthy owner of Virgin Atlantic Airways, was asked how to become a millionaire, he had a quick answer: "There's really nothing to it. Start as a billionaire and then buy an airline"

Although Qantas has undenibly had a great run, and is certainly one of the best run airlines in the world, it operates an incredibly difficult business.

In essence, an airline seat is a commodity. Within classes (ie. discount vs premium), there's not a great deal of differentiation between carriers -- at least not ones that are significant enough to attach any meaningful pricing power. As competitors vie for capacity, price is the main tool they have, which ensures margins remain razor thin. When you have huge fixed costs, even small changes to volumes can result in big swings in the bottom line.

On the airline value chain, others tend to capture most of the value. Airports, service, maintenance, parts, plane manufacturers etc do much better.

Also, it is extremely capital intensive, subject to volatile (and unpredictable) oil prices, exposed to heavily unionised workforces (i'm pro-unionm generally btw, but it does make cost control harder for a business), has high levels of debt ($4.8b or so).

Revenues for Qantas have essentially been flat over the past decade (growing at an average rate of 0.6%pa -- so a decline in real terms). Earnings have been very volatile. Dividends unreliable.

Yes, there are factors that improve the efficiencies of airlines, especially with technology. But this is accessible to all players, and not unique to Qantas.

At a low enough price, there's certainly a value play to be had. But not a long term buy & hold, in my opinion.

Just be wary that low PEs can quickly become high PEs if earnings take a hit. And, if history is any guide, that's almost certain to happen at some point.