Qantas posts second biggest profit on record on back of soaring passenger revenue
Budget airline Jetstar emerges as Qantas Group's star performer with a stunning 54 per cent earnings surge while the parent company charts aggressive growth.
Qantas chief executive Vanessa Hudson will seek to emulate Jetstar’s extraordinary earnings growth with the arrival of new aircraft and the addition of new routes to break the fleet renewal drought at its flagship brand.
Ms Hudson announced better than expected full-year results in front of scores of staff at Qantas headquarters on Thursday, when she was determined to put the dramas of its cyber attack and a bruising Federal Court judgment behind the airline.
It helped that underlying annual profit of $2.39bn was up 15 per cent on 2023-24, and only slightly under 2023’s record of $2.46bn. Statutory net profit was $1.6bn, up 28 per cent, and passenger revenue climbed to $20.4bn from $18.9bn.
A fully franked dividend of 16.5c a share was complemented by a special dividend of 9.9c, while 25,000 employees stand to benefit from a new share plan amounting to $1000 worth of equity a year.
Jetstar proved the standout performer for the group with its 54 per cent increase in earnings to $769m, while Qantas Domestic contributed $1bn, almost flat.
Led by Steph Tully, Jetstar’s domestic arm operating margin of 16 per cent eclipsed that of its premium airline partner on 13.9 per cent.
Ms Hudson said it was “fantastic that Jetstar had hit its margin target” which was attributed to the budget carrier’s younger fleet, strong ancillary revenue and capacity growth.
Jetstar added 11 new aircraft to Qantas and QantasLink’s six, which helped deliver greater fuel efficiency plus thousands more seats to the market.
Qantas would similarly benefit as deliveries of new 200-seat A321XLRs accelerate, with Ms Hudson announcing a further 20 had been added to its order, arriving from 2028.
That meant 48 XLRs in total would join the Qantas fleet, providing more range and more seats, with at least 16 to be fitted with lie-flat beds in business class.
“It helps us accelerate the retirement of the 737s, and unlock new possibilities in terms of flying,” said Ms Hudson. “It’s also going to play a really important role on transcontinental routes for both domestic flights and connecting long haul services.”
There was also the much-anticipated arrival of custom A350-1000s specifically ordered by Qantas to operate 20 hour-plus Project Sunrise flights.
The first of 12 such aircraft is due to enter the final assembly line at the Airbus factory in Toulouse in October, and land in Australia a year later.
“When you get new aircraft that are actually flying as far as we’re intending, we’re going to need to do a lot of trials with that aircraft, so we’ll be working with our crew to make sure we’re on top of all of those challenges that are on this mission,” Ms Hudson said.
“We intend to start commercial flying to those long destinations when we’ve got three aircraft, because to do a daily service of that distance, you need three aircraft to do that so that will occur in the first quarter of 2027.”
With the cyber attack and unlawful outsourcing case now behind it, Ms Hudson was confident Qantas would build on its financial success, customer relationships and engagement scores.
She said there was no question Qantas had learned from the fallout over the illegal sackings and defended the decision not to give evidence during the Federal Court hearings to determine a penalty.
Judge Michael Lee was particularly critical of Ms Hudson’s absence from the witness box, deciding she was best placed to speak on cultural change, contrition and “what if anything she would have done differently”.
“We had four years of senior executives who were involved in that decision on the stand cross-examined multiple times and I didn’t feel that there was more to that, that I could add,” Ms Hudson said.
“Culture is something that is outside of that process and the most important part of what I look to in feeling confident that the culture is changing and will continue to change, is what our customers say and it’s what our people say.”
It appeared unlikely the scathing judgment would dent executive bonuses, with Ms Hudson referring to recent comments by Qantas chairman John Mullen that any clawbacks were determined last year.
As for her own performance, Ms Hudson said she believed the “results today speak for themselves”.
“What I’ve been saying for two years is my focus has been trying to get the balance right, and I think the results show that we have got good outcomes both in terms of financial outcomes, customer outcomes, operational outcomes, engagement scores, but also continuing to be able to reward our shareholders,” Ms Hudson said.
The Qantas share price closed up 9 per cent at a record $12.11 on Thursday.
Market analysts lauded the result and Jetstar’s performance. Barrenjoey’s Matt Ryan said it was a “clean result with better than expected outlook commentary”.
“Of particular note, Qantas is expecting 5 per cent domestic capacity growth in the first half of FY26 and the unit revenue assumption suggests that this capacity will be met with demand,” said Mr Ryan.
Unions were less complimentary, saying the big increase in profits came in the face of “illegal sackings, threats to workers, cruel bargaining tactics and blanket refusal to negotiate fairly”.
Flight Attendants Association of Australia national secretary Teri O’Toole said clearly Qantas was doing well, which she expected to be reflected in new enterprise agreements.
“Cabin crew are the largest group of employees and are responsible for holding Qantas together along with other workers, so this needs to be reflected in their working conditions and pay,” said Ms O’Toole.
Originally published as Qantas posts second biggest profit on record on back of soaring passenger revenue
Pallas Group scrubs out all ‘bad’ debts as loan growth surges
