Key Highlights

  • Underlying Profit Before Tax fell $330 million to $2.06 billion, while Statutory Profit After Tax declined $316 million to $1.29 billion.
  • The Middle East conflict had a net Earnings impact of $420 million, despite a $610 million increase in the Group's fuel bill.
  • Qantas Loyalty delivered 12% Underlying EBIT growth to $625 million, while Group Domestic Underlying EBIT was $1.44 billion.
  • A final fully Franked Dividend of 19.8 cents per share ($300 million) was declared, and the previously announced $150 million share buy-back will not proceed.

Qantas Airways Limited (ASX:QAN) reported Underlying Profit Before Tax of $2.06 billion for FY26, down $330 million on FY25, while Statutory Profit After Tax was $1.29 billion, down $316 million. Underlying Earnings Per Share fell 14 cents to 96 cents. CEO Vanessa Hudson said the year was defined by two very different operating environments, with strong performance across both Qantas and Jetstar in the first half before conflict in the Middle East and broader economic headwinds affected the final four months.

The Group said the conflict's net impact on earnings was limited to $420 million, despite a $610 million increase in the fuel bill, as the airline quickly adjusted fares and capacity and redeployed aircraft to provide customers with more Options to fly to Europe. The Group's total fuel cost for the year was $5.7 billion, including a second-half fuel cost impact of $610 million, with hedging of Brent Crude oil providing a $400 million benefit.

Domestic and International Segment Performance

Group Domestic delivered $1.44 billion in Underlying EBIT despite significantly higher fuel costs, with Qantas Domestic Revenue increasing 5% supported by a 3% increase in capacity, and Jetstar Domestic earnings up 15% on an 11% increase in revenue. Qantas recorded almost 85% on-time departures in June, which the company said outperformed any major global airline for the month, alongside its highest Net Promoter Score in a decade.

Group International Underlying EBIT declined to $650 million, reflecting significantly higher fuel costs, even as Qantas International revenue grew 8% on a 7% increase in capacity. Demand for flights to Europe surged as travellers avoided the Middle East, with the airline adding nearly 16,000 seats to and from Europe in the fourth quarter through redeployed aircraft, and premium cabin revenue growing 15%, twice the rate of Economy. Jetstar International revenue rose 14% on 11% capacity growth.

Qantas Loyalty Provides Earnings Resilience

Qantas Loyalty delivered Underlying EBIT growth of 12% to $625 million, with active members up 6% and points earned up 9%, driven by engagement across retail and financial services partners including Uber, which the company said was its fastest-growing partner with more than 1 million members earning points through rides and deliveries. Points redeemed grew 9%, including a record 5 million flight Reward Seats.

The Group said Qantas Loyalty is expected to continue providing earnings resilience, with Underlying EBIT forecast to grow 5% to 7% in FY27, remaining on track for its 2030 target of $800 million to $1.0 billion in Underlying EBIT. One in four Australian small and medium-sized businesses are now part of Qantas Business Rewards, with membership up 11% and earnings growing nearly 30%.

Fleet Renewal, Capital Position and Dividend

The Group ended FY26 with $13.3 billion of liquidity, including $3.3 billion in cash, and net Debt of $6.2 billion, in the middle of its target range of $5.5 billion to $6.9 billion. Net Capital Expenditure totalled $4.0 billion, up 3%, as the Group's fleet renewal program continued, with 17 new aircraft delivered during the year and up to 31 more expected in FY27. Capital expenditure for FY27 is expected to be between $4.3 billion and $4.6 billion.

The Board approved a fully franked final base dividend of $300 million, or 19.8 cents per share, to be paid on 14 October, in addition to the Interim Dividend of $300 million paid in April. The previously announced $150 million on-market share buy-back will not proceed. The Group also confirmed it will provide $1,000 in Qantas shares to around 25,000 non-executive employees, having again met the financial performance target under its share plan. For FY27, Group Domestic total unit revenue is expected to increase 8% to 10% in the first half compared with the first half of FY26, with jet fuel prices expected to remain elevated.

Conclusion

Qantas delivered a year of two distinct operating environments in FY26, with strong first-half trading across both Qantas and Jetstar offset by the impact of the Middle East conflict on fuel costs and business confidence in the final four months. Despite the decline in both underlying and statutory profit, the Group maintained dividend payments and continued its fleet renewal program at pace, while confirming that its previously flagged share buy-back will not proceed, positioning the FY27 outlook around continued fleet investment, elevated fuel costs and resilient earnings from its Loyalty division.