Qantas announced its annual financial results, revealing pre-tax underlying profit of $2.06bn in the year to 30 June, marking the lowest performance in four years. Chief Executive Vanessa Hudson indicated the airline would pursue additional revenue opportunities through fare increases and expanded ancillary charges, noting that passenger demand remained resilient despite broader cost-of-living pressures affecting consumers.
Higher fuel prices, attributed partly to regional conflict, significantly impacted profitability across the airline’s operations, particularly affecting its aging A380 fleet used for long-haul international routes. In response, Qantas accelerated plans to retire these aircraft, moving the timeline from 2032 to 2028 as maintenance costs and service disruptions are expected to increase. The company indicated it would acquire up to 20 additional aircraft from 2030 onward, with consideration being given to Airbus A350-1000s and Boeing 787 Dreamliners, though no plans were announced for additional ultra-long haul A350s beyond those designated for the Project Sunrise Sydney-London service.
Jetstar, Qantas’s low-cost subsidiary, has emerged as a focal point for revenue expansion initiatives. The budget carrier recently introduced charges for carry-on baggage placement in overhead lockers, a move that drew criticism from consumer advocates. Leadership indicated a substantial pipeline of additional ancillary fee products in development. Non-seat revenue sources, including checked baggage, seat selection, cancellation protections, and food services, currently generate more than $1bn of Jetstar’s $6bn annual revenue, with management signaling significant growth potential in this segment.
Overall Qantas revenue increased 7% to $25.5bn, though the additional $610m in fuel costs across the network compressed profitability. The airline’s loyalty program contributed meaningfully to results, increasing underlying earnings by 12% to $625m, with active membership growing 6%. The company maintains expectations that the loyalty business will grow earnings by at least 5% in the coming financial year and achieve $800m in earnings targets by 2030, despite anticipated impacts from upcoming credit card surcharge regulations.
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