Qantas posts full-year profit despite higher fuel costs and global disruptions

Qantas Group has delivered a profitable full-year result, driven by steady domestic demand, double-digit growth in its loyalty division, and schedule adjustments that helped offset rising fuel prices and disruptions from conflict in the Middle East. The airline recorded underlying earnings before interest and tax (EBIT) of $1.44 billion in its domestic division, $650 million in international and freight operations, and $625 million in Qantas Loyalty—up 12 per cent from the previous year. The results came despite significant fuel cost increases. The Group’s total fuel bill reached $5.7 billion, driven by higher global jet refining margins that rose from US20 per barrel in February to a peak of roughly US$120. Second-half fuel costs increased by $610 million. Brent crude oil hedging provided a $400 million benefit, while capacity and fare changes limited the net earnings impact to $420 million. Qantas closed the financial year with $13.3 billion in liquidity, including $3.3 billion in cash, $2.1 billion in undrawn facilities, and $8.0 billion in unencumbered assets. Net debt rose to $6.2 billion, within the target range of $5.5 billion to $6.9 billion. The Board approved a fully franked final dividend of $300 million (19.8 cents per share) to be paid on October 14, matching the $300 million interim dividend paid in April. A previously announced $150 million on-market share buyback will not proceed. Net capital expenditure reached $4.0 billion for the year and is projected between $4.3 billion and $4.6 billion in FY27. Qantas Group CEO Vanessa Hudson stated that the year was defined by two distinct operating periods. “This has been another year of progress, with customer satisfaction at its highest in a decade and world-leading operational performance, even as the aviation industry faced record high fuel costs and disruption from the conflict in the Middle East,” Hudson said. “We came through it with a strong result, which is what allows us to continue investing in the largest fleet renewal in our history.” During the first half, demand grew across both domestic and international networks for Qantas and Jetstar. Mainline Qantas expanded premium cabin sales, while Jetstar captured budget leisure traffic. In the final four months, Middle East disruptions and broader economic uncertainty reduced travel demand among corporate and government clients. Qantas responded by adjusting fares, trimming capacity, and shifting aircraft to European routes to capture demand from travellers avoiding the Middle East. Group Domestic delivered $1.44 billion in Underlying EBIT. Qantas Domestic revenue rose 5 per cent alongside a 3 per cent capacity increase. Operational performance improved, with on-time departures reaching nearly 85 per cent in June. Between March and June, fare and capacity adjustments led to a 5 per cent gain in unit revenue. Leisure travel and intra-Western Australia resource sector demand remained stable, while corporate and government travel slowed. Jetstar Domestic lifted earnings by 15 per cent on an 11 per cent revenue increase and a 4 per cent lift in capacity. Approximately half of Jetstar’s passengers flew for under $150. Jetstar ended June with 25 A321LRs and five A320neos, which now make up nearly half of its narrowbody capacity. Group International and Freight generated $650 million in Underlying EBIT. Qantas International revenue increased 8 per cent with a 7 per cent rise in capacity. Seat factor on routes to London, Paris, and Rome reached 90 per cent in the fourth quarter after the airline added nearly 16,000 seats. Premium cabin revenue grew 15 per cent, doubling the growth rate of economy cabins. Jetstar International expanded capacity by 11 per cent and revenue by 14 per cent, launching nine new overseas routes and shifting Boeing 787 aircraft to services such as Melbourne–Colombo. The Group also restructured its regional ventures: Jetstar Asia closed operations in July 2025, and Qantas plans to exit its minority stake in Jetstar Japan by June 2027. Key fleet updates include: Project Sunrise: The first A350-1000ULR will arrive in April, ahead of non-stop Sydney–London flights planned for October. A380 Retirement: The Airbus A380 fleet will be gradually phased out starting in calendar year 2028, replaced by A350s and Boeing 787s. Orders: Qantas has firm orders for 12 A350s and 12 Boeing 787s, with new 787s arriving from FY28. It is also negotiating to convert roughly 20 purchase options into firm orders from 2030. Operating Margins: Fleet renewal is expected to raise Qantas International operating margins to 10–12 per cent from FY32. Qantas Freight net revenue rose 9 per cent, with operations starting at Western Sydney International’s 24-hour cargo precinct in July 2026. Qantas Loyalty reported a 12 per cent increase in Underlying EBIT to $625 million. Active members increased 6 per cent, while total points earned and redeemed both rose 9 per cent. Uber became the fastest-growing partner, with over one million members earning points on rides and deliveries. One in four Australian small and medium-sized businesses now participate in Qantas Business Rewards, where earnings rose nearly 30 per cent. Members booked a record 5 million reward seats during the year, and bookings via Hotels, Holidays and Tours reached $1.6 billion. Qantas also renewed commercial terms with major credit card partners following the Reserve Bank of Australia’s review into card surcharges. Approximately 25,000 non-executive employees will receive $1,000 in Qantas shares after the Group met its annual financial targets. Since 2023, the airline has created 4,400 operational roles in Australia. Over $100 million was spent during the year on training infrastructure, including new flight simulators for A350, A220, and A320 aircraft and emergency training facilities in Sydney and Perth. Qantas expects passenger demand to remain stable into early FY27. Unit Revenue (TRASK): Both Group Domestic and Group International are projected to increase unit revenue by 8 to 10 per cent in the first half of FY27 compared to the first half of FY26. Fuel Costs: First-half FY27 fuel costs are estimated at approximately $3.6 billion, including hedging and carbon costs. Entry into Service Costs: Expected to rise to $165 million in FY27 due to A350-1000ULR preparations. Loyalty Earnings: Qantas Loyalty EBIT is forecast to grow 5 to 7 per cent in FY27, tracking toward its 2030 target of $800 million to $1.0 billion. For Editorial Inquiries Contact: Editor Matt Driskill at [email protected] For Advertising Inquiries Contact: Head of Sales Sally Passey at [email protected]