Qantas announced annual results showing a significant decline in profitability, with pre-tax underlying profit reaching $2.06bn for the year to 30 June. The company attributed the downturn largely to elevated fuel costs linked to regional geopolitical tensions. Chief Executive Vanessa Hudson indicated the airline would pursue additional revenue opportunities through fare increases and expanded ancillary services, noting that strong passenger demand persisted despite broader economic pressures affecting consumers.
The airline’s older A380 aircraft were particularly affected by higher fuel expenses, prompting an acceleration of the retirement timeline for these planes to 2028, five years ahead of the previously announced 2032 date. Qantas expects maintenance costs and operational disruptions for the aging fleet to increase significantly. The company plans to purchase up to 20 additional aircraft beginning in 2030 as part of its broader fleet modernization initiative, with Airbus A350-1000s and Boeing 787 Dreamliners under consideration.
Jetstar, the airline’s low-cost subsidiary, is driving profitability improvements through expanded ancillary revenue. The carrier recently introduced fees for carry-on luggage placement in overhead bins, a move that drew consumer criticism. Jetstar’s leadership indicated a substantial pipeline of additional service unbundling initiatives designed to keep advertised fares competitive while generating revenue through add-on charges. Non-seat fees currently generate over $1bn of Jetstar’s $6bn annual revenue, with expectations for significant growth in this category.
The airline increased overall revenue by 7% to $25.5bn but absorbed an additional $610m in fuel costs across its network. Qantas’s loyalty program contributed materially to earnings growth, increasing underlying profit by 12% to $625m with a 6% increase in active members. The company maintained optimistic earnings projections for its frequent flyer business, forecasting at least 5% growth in the coming financial year and targeting $800m in earnings by 2030. The company’s share price gained more than 4% following the earnings announcement.
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