Qantas announced its annual results, revealing pre-tax underlying profit of $2.06bn for the year ending June 30, marking the airline’s weakest performance in four years. The decline was primarily attributed to increased fuel costs linked to geopolitical tensions in the Middle East. Chief executive Vanessa Hudson indicated the company would pursue additional revenue growth opportunities, stating the airline would continue to push pricing where passenger demand remained resilient despite broader cost-of-living pressures affecting consumers.
The elevated fuel costs have had a particularly pronounced impact on Qantas’s aging A380 fleet, leading the company to accelerate retirement plans for these aircraft from 2032 to 2028. As part of its fleet renewal strategy, Qantas plans to acquire up to 20 additional aircraft starting in 2030, with Airbus A350-1000s and Boeing 787 Dreamliners under consideration. The company noted it has no current plans to order additional ultra-long haul A350 variants beyond those designated for the planned Project Sunrise Sydney-London service.
Jetstar, the company’s low-cost subsidiary, continues to serve as a significant profit driver despite the challenging environment. Jetstar’s chief executive Stephanie Tully revealed plans to expand ancillary fees beyond the recently introduced carry-on baggage charges. Non-seat fees including checked baggage, seat selection, cancellation protections, and food services currently generate more than $1bn of Jetstar’s $6bn annual revenue, with leadership indicating this figure would increase substantially. Median Jetstar fares reached approximately $150 in the year to June, up from nearly $100 in 2022.
Qantas achieved a 7% increase in overall revenue to $25.5bn while absorbing an additional $610m in fuel costs. The company’s loyalty program contributed significantly to profitability, boosting underlying earnings by 12% to $625m with a 6% expansion in active members. Qantas remains confident its frequent flyer points business will achieve at least 5% earnings growth in the coming financial year and reach $800m in earnings by 2030. The airline’s share price rose more than 4% following the Thursday announcement.
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