Highlights

• Qantas reported FY26 underlying profit before tax of $2,064 million, down 13.8 per cent, on revenue of $25,516 million.

• The Middle East conflict cost the group a net $420 million of underlying EBIT, mainly through higher second-half fuel costs.

• Qantas declared a fully franked final dividend of 19.8 cents and decided not to proceed with its $150 million buy-back.

• Qantas expects the first Sunrise aircraft in April 2027 and plans to divest its Jetstar Japan stake by June 2027.

Fuel set the tone for the Qantas Airways Limited (ASX:QAN) FY26 result: a $610 million jump in costs during the second half, softened by about $400 million of hedging, left a net hit of roughly $420 million from the Middle East conflict. Shares were trading at A$8.42 on 23 October 2026, down 0.36%.

Fuel Shock Cuts Into a Strong Revenue Year

Revenue and other income rose 7.1 per cent to $25,516 million, yet underlying profit before tax slid 13.8 per cent to $2,064 million and underlying EBIT fell 11 per cent to $2,348 million. Statutory profit after tax was $1,289 million, down 19.7 per cent, and the operating margin eased to 9.2 per cent from 11.1 per cent.

Management said demand was strong in the first half but weakened over the final four months as businesses and government trimmed travel spending. Passengers were flat at 55.9 million.

Segment Results Pull in Different Directions

Qantas Loyalty was the bright spot, lifting underlying EBIT 12 per cent to $625 million. Qantas Domestic earned $907 million, against $1,056 million a year earlier, and Qantas International, including Freight, delivered $371 million, down from $596 million. Jetstar Group contributed $723 million, compared with $769 million.

Net capital expenditure reached $3,968 million, leaving net free cash flow at negative $75 million. Net debt closed at $6,161 million, in the middle of the $5.5 billion to $6.9 billion target range.

Capital Management: A Dividend Paid, a Buy-Back Dropped

The final dividend of $300 million, or 19.8 cents per share fully franked, was payable on 14 October 2026 to holders on the 16 September record date. An interim dividend of the same size was paid in April.

The $150 million on-market buy-back announced in February never began, and on 27 August the group decided not to proceed with it.

Fleet Renewal, Project Sunrise and the Year Ahead

The group took 17 new aircraft in FY26 and ended June with 372 in its fleet. It expects up to 31 deliveries in FY27, including 24 for Qantas. The first Project Sunrise A350-1000ULR is due to arrive in April 2027, and the group has firm orders for 12 A350s. A380 retirements are planned to start from calendar 2028.

Qantas also plans to divest its minority holding in Jetstar Japan, following a binding agreement with Japan Airlines dated 4 August 2026. Completion is expected by the end of June 2027, subject to regulatory approvals.

For the first half of FY27, Qantas expects group domestic and international unit revenue to rise by about 8 to 10 per cent, while total group capacity is guided flat. Domestic capacity is forecast to fall about 3 per cent and international capacity to rise about 2 per cent. Qantas Loyalty underlying EBIT is expected to grow 5 to 7 per cent.

Capital expenditure is guided at $4.3 billion to $4.6 billion, with net debt expected toward the upper end of its target range by 30 June 2027. First-half fuel costs are expected near $3.6 billion.

The annual general meeting is scheduled for 6 November 2026, where shareholders will vote on the election of Alison Watkins as a director.