Qantas announced annual results showing pre-tax underlying profit of $2.06bn for the year to 30 June, representing a significant decline attributed primarily to higher fuel costs linked to regional conflicts. Chief Executive Vanessa Hudson indicated the airline would continue pursuing revenue increases through fare hikes, noting that strong passenger demand provided opportunity for further pricing action despite broader cost-of-living pressures affecting consumers.
The company’s profitability was particularly impacted by fuel expenses affecting its older A380 fleet, prompting an accelerated retirement timeline. Rather than phasing out the wide-body aircraft in 2032 as previously planned, Qantas said it would begin retiring A380s in 2028 due to expected increases in maintenance costs and operational disruptions. The airline indicated plans to purchase up to 20 additional aircraft from 2030 onwards, with Airbus A350-1000s and Boeing 787 Dreamliners under consideration for fleet renewal.
Jetstar, Qantas’s budget subsidiary, emerged as a key profit driver despite industry-wide pressures. The carrier generated over $1bn in ancillary revenue from non-seat fees including baggage, preferred seating, and cancellation rights out of its $6bn total annual revenue. Jetstar management signaled plans to expand these add-on offerings following recent controversy over newly introduced charges for overhead bin access, with executives describing a substantial pipeline of additional ancillary initiatives.
Qantas’s overall revenue increased 7% to $25.5bn over the reporting period, though this growth was substantially offset by an additional $610m in fuel costs across its network. The airline’s loyalty program contributed meaningfully to profitability, increasing underlying earnings by 12% to $625m with 6% growth in active members. Management expressed confidence in the frequent flyer program’s continued performance, projecting at least 5% earnings growth in the coming financial year and targeting $800m in loyalty earnings by 2030.
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