Qantas Airways reported a 14% decline in underlying profit before tax for the first half of fiscal 2026, totaling AUD 2.06 billion, as elevated fuel costs and geopolitical disruptions weighed on results. The airline’s statutory profit after tax fell AUD 360 million year-over-year to AUD 1.29 billion. Excluding a AUD 420 million net impact from the Middle East conflict in the fourth quarter, underlying profit would have increased, the company said.
The Sydney-based carrier’s stock rose 4.5% to AUD 9.64 following the results, extending gains from a February interim dividend announcement. Shares now sit 14% above their 52-week low of AUD 8.04 but remain below the peak of AUD 12.62. Qantas returned AUD 700 million to shareholders through a AUD 300 million interim dividend and a AUD 400 million final payout, while pausing a previously announced AUD 150 million share buyback.
Revenue growth accelerated in the second half, with domestic and international unit revenue rising 5% and 7%, respectively. Total unit revenue for the full year increased 3.6%, driven by a 4% gain in domestic and 5% in international segments. Operating margin stood at 9.2%, while total unit cost excluding fuel climbed 4.1%. Fuel expenses are projected to reach AUD 3.6 billion in the first half of fiscal 2027, based on a market jet fuel price of AUD 197 per barrel, with Qantas 85% hedged in Brent crude for the period.
Qantas Loyalty delivered underlying earnings before interest and tax of AUD 625 million, up 12% year-over-year, with EBIT expected to grow 5% to 7% in fiscal 2027. The loyalty segment is targeting AUD 800 million to AUD 1 billion in EBIT by fiscal 2030. Group domestic EBIT reached AUD 1.44 billion with a 13% margin, while Qantas International reported AUD 371 million in EBIT. Jetstar Australia International contributed AUD 279 million with an 11% operating margin.
The company added 29 aircraft to its fleet in fiscal 2026, including six Airbus A321XLRs for Qantas, five A220s for QantasLink, and five A321LRs. Up to 31 new deliveries are planned over the next 12 months, with Jetstar operating nearly 50% of its narrow-body capacity in new aircraft. Qantas also invested over AUD 100 million in training infrastructure, including simulators for the A350, A220, and A320, supporting annual training for more than 10,000 pilots and cabin crew.
Chief Executive Vanessa Hudson highlighted the company’s progress amid a "materially higher fuel cost environment" and geopolitical challenges, noting that the dual-brand strategy allowed flexibility in redeploying aircraft. The airline’s customer satisfaction metrics improved, with net promoter scores rising 7 points for Qantas Domestic and 5 points for Qantas International. Qantas Business Rewards now includes one in four Australian small and medium-sized enterprises.
Looking ahead, Qantas International Chief Executive Cam Wallace said the retirement of the Airbus A380 fleet would unlock approximately AUD 300 million in net cash flow benefits from fiscal 2028 to 2031, primarily through reduced maintenance costs. Project Sunrise, which begins with the delivery of the first Airbus A350-1000ULR in April 2027, is expected to deliver an AUD 400 million earnings uplift by fiscal 2031 as the new fleet scales.
