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Underlying Profit Before Tax: $1.46 billion, up 5% versus first half 2025. Statutory Profit After Tax: $925 million, flat versus first half 2025. Earnings Per Share: $0.68, a 7% increase. Operating Cash Flow: $1.8 billion. Net Debt: $5.6 billion, at the bottom of the FY26 target range. Net Capital Expenditure: $1.8 billion. Interim Shareholder Distribution: Up to $450 million, including a $300 million fully franked base dividend and a $150 million share buyback. Group Domestic EBIT: Over $1 billion, up 14% with an EBIT margin of 18%. Jetstar Domestic Earnings: Up 38% with an EBIT margin of 22%. Group International EBIT Impact: Down 6% due to cost escalations. Qantas Loyalty Underlying EBIT: $286 million, up 12%. Fleet Investment: $1.8 billion, including 18 new aircraft. Qantas Net Promoter Score: Increased by 5 points. Jetstar Net Promoter Score: Increased by 4 points. On-Time Performance: Qantas at 70%, Jetstar at 71%. Frontline Workforce Increase: 4% during the half.

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Release Date: February 26, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Qantas Airways Ltd (QABSY) reported a 71 million increase in underlying profit before tax compared to the previous year. The company announced a fully franked base dividend of $300 million, an increase of $50 million, and a non-market share buyback of up to $150 million. Strong demand for travel across Australia and internationally has been a key driver of performance. The fleet renewal program is progressing well, with significant investments leading to improved financial performance, customer experience, and emissions reduction. Qantas Loyalty program continues to grow, with a 12% increase in underlying EBIT and membership exceeding 18 million members.

Negative Points

Qantas International's underlying EBIT was impacted by 6% due to cost escalations, including higher engineering and operational wages. The company faces ongoing challenges with higher airport security and navigation charges escalating above inflation rates. Unfavorable foreign exchange movements impacted profit by 76 million during the period. The entry into service and fleet-related transitionary costs are expected to increase by 20 million in the second half of the year. Qantas International's capacity growth is challenged by the need to manage costs and demand fluctuations, particularly in the leisure segment.

Story Continues

Q & A Highlights

Q: Can you discuss the outlook for corporate growth and the demand for business travel in the second half of 2026? A: Vanessa Hudson, CEO, explained that Qantas continues to see strong demand for both premium leisure and business travel, particularly from small and medium enterprises and the resources market in Western Australia. Markus Svensson, CEO of Qantas Domestic, added that the capacity being added in the second half is expected to meet this demand.

Q: What are the motivations behind the share buyback, and how does it relate to your dividend strategy? A: Robert Marcolina, CFO, stated that the decision to conduct a share buyback was influenced by the current share price value and the availability of franking credits. The base dividend has been increased to ensure sustainability through the cycle, and the approach to additional distributions will remain consistent, considering both dividends and buybacks.

Q: How is Qantas International managing capacity growth and yield in the face of inflationary pressures? A: Vanessa Hudson, CEO, highlighted the importance of the A380 fleet in Qantas International's capacity strategy, contributing to ASK growth. Cameron Wallace, Qantas Airways, noted that the A380s provide flexibility and resilience, allowing for strategic capacity adjustments, such as redeploying aircraft to different routes based on demand.

Q: Can you provide insights into the economics of Project Sunrise and the expected RASK premium? A: Vanessa Hudson, CEO, expressed optimism about Project Sunrise, citing strong demand for ultra-long-haul routes like Perth to London and Auckland to JFK. The business case assumes a premium yield uplift, driven by a favorable cabin mix rather than fare increases. Cameron Wallace added that the A350 ULR aircraft will complement existing routes and enhance premium offerings.

Q: Are there any plans to reconsider long-term margin targets for Qantas' airline businesses? A: Robert Marcolina, CFO, confirmed that the current margin targets remain unchanged. Jetstar has already achieved its targets, and Qantas Domestic and International are on track to meet theirs, with Project Sunrise expected to contribute significantly to future earnings.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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