Highlights

  • Qantas (ASX:QAN) reported FY26 Revenue of $25.52 billion, up from $23.82 billion in the prior year.
  • Underlying profit before tax declined to $2.06 billion, while statutory NPAT fell to $1.29 billion amid higher fuel and disruption costs.
  • Premium travel Demand and Qantas Loyalty continued to support revenue and yields.
  • For 1H27, Qantas expects domestic capacity to decline around 4%, international capacity to rise around 4% and RASK growth of 8% to 10%.

Qantas (ASX:QAN) delivered FY26 revenue growth despite a decline in profit as higher fuel costs and Middle East disruption weighed on earnings.

At the time of writing on 27 August 2026, Qantas shares were trading at AUD 9.68, up 4.99% on the day.

The airline’s FY26 performance showed that demand remained relatively resilient, with revenue growth supported by premium travel, international activity and loyalty operations. However, the cost environment remained challenging, particularly due to fuel prices and geopolitical disruption.

FY26 Performance

Qantas reported FY26 revenue of $25.52 billion, increasing from $23.82 billion in the previous year.

Underlying profit before tax was $2.06 billion, representing a decline of around 14% year-on-year.

Statutory net profit after tax declined approximately 20% to $1.29 billion, a reduction of $316 million compared with the prior year.

Underlying Earnings per share were 96 cents.

Underlying EBITDA was broadly stable at approximately $4.64 billion, increasing around 1%.

The result reflected continued revenue growth but lower profitability as higher operating costs offset the benefits of resilient passenger demand.

Cost Pressures

Fuel was one of the most significant earnings pressures during FY26.

Qantas reported that its fuel bill increased by approximately $610 million compared with the prior year.

The company also experienced an estimated $420 million net earnings headwind associated with disruption linked to conflict in the Middle East.

These pressures affected the second half of the year more heavily, with management describing FY26 as a year of contrasting trading conditions.

Higher costs meant revenue growth did not translate directly into higher profit, placing greater emphasis on pricing, capacity management and operational efficiency.

Premium Demand

Premium travel remained an important contributor to Qantas’ performance.

The company saw continued demand across higher-value travel categories, helping support yields even as operating conditions became more complex.

Geopolitical disruption also influenced travel patterns, with some passengers redirecting travel away from Middle Eastern routes towards Europe.

Qantas responded by adjusting aircraft deployment and increasing selected European travel options.

Premium demand provides an important earnings lever because higher-value passengers can support unit revenue even when cost pressures remain elevated.

Loyalty Growth

Qantas Loyalty continued to provide Diversification beyond the airline’s passenger operations.

The company reported approximately 12% growth in both revenue and earnings from the loyalty business.

The division benefits from frequent flyer activity, financial services partnerships and broader customer engagement.

Its contribution remains important because it provides a recurring earnings stream that is less directly exposed to aircraft utilisation and aviation operating costs.

Continued growth in Loyalty could therefore help support group profitability as Qantas manages Volatility across its flying operations.

Capital Returns

Qantas declared a fully franked final Dividend of 19.8 cents per share, compared with 21.5 cents previously.

The final dividend represents approximately $300 million in Shareholder distributions and follows an Interim Dividend of around $300 million paid in April.

The company also withdrew an unused $150 million share buyback.

This decision reflects a more cautious approach to Capital management as Qantas balances shareholder returns with fleet renewal, Investment requirements and elevated operating costs.

Fleet Investment

Fleet renewal remains a major strategic priority.

Qantas received 17 aircraft during FY26, with further deliveries expected during FY27.

The first Airbus A350-1000ULR aircraft is scheduled for April 2027, supporting the airline’s long-term international network strategy.

New aircraft are expected to improve efficiency, expand network flexibility and support additional long-haul opportunities.

However, fleet investment also requires significant capital and careful execution around delivery timing and operational integration.

FY27 Outlook

For the first half of FY27, Qantas expects domestic capacity to decrease by approximately 4%.

International capacity is expected to increase by around 4%.

Importantly, revenue per available seat kilometre, or RASK, is expected to increase by 8% to 10% across both domestic and international markets.

That pricing outlook is a key component of the FY27 earnings case because it suggests the airline expects fares and revenue quality to remain supportive.

At the same time, Qantas expects a first-half fuel bill of approximately $3.6 billion, meaning fuel remains a major offset to stronger pricing.

Key Focus Areas

Investors will continue monitoring whether Qantas can deliver its targeted 8% to 10% RASK growth while maintaining demand.

Fuel costs will remain one of the most important variables affecting earnings.

Domestic capacity reductions will also be closely watched, particularly whether lower Supply supports stronger pricing without materially reducing passenger volumes.

Fleet execution, international demand and Loyalty earnings will provide further indicators of the group’s FY27 performance.

Risks

Fuel price volatility remains a significant risk for Qantas, particularly given the expected $3.6 billion first-half FY27 fuel bill.

Geopolitical developments can also affect route availability, travel demand and operating costs.

Domestic consumer spending conditions may influence discretionary travel, while international operations remain exposed to currency and economic changes.

Fleet renewal introduces execution and Capital Expenditure risks.

Qantas must also balance pricing strength with affordability, as sustained fare increases could eventually affect passenger demand.

Future Outlook

Qantas enters FY27 with higher revenue, resilient premium demand and supportive unit revenue guidance, but also significant cost pressures.

The FY26 result showed that demand remained relatively healthy even as profit declined due to higher fuel costs and geopolitical disruption.

The central question for FY27 will be whether pricing strength can continue offsetting the elevated cost base.

If Qantas can maintain premium demand, deliver its capacity strategy and manage fuel pressures effectively, the airline could strengthen earnings despite a challenging external environment.