Qantas FY26 Underlying PBT $2.06b, Down $330m on FY25

Qantas Airways Limited (ASX:QAN) reported Underlying Profit Before Tax of $2.06 billion for FY26, down $330 million on FY25, and Statutory Profit After Tax of $1.29 billion, down $316 million. Underlying earnings per share was 96 cents, down 14 cents. The release defines the net impact of the conflict in the Middle East, which it puts at $420 million, as the increased annual fuel cost minus the net benefit of mitigations; the group's total fuel cost for the year was $5.7 billion, including a second half fuel cost impact of $610 million, with hedging of Brent crude oil providing a $400 million benefit and other mitigations including fare and capacity adjustments further reducing the net impact. The group was largely exposed to movements in jet refining margins, which the release says increased from US$20 a barrel in February to a peak of around US$120. The definition of Underlying PBT and the reconciliation between Underlying and Statutory Profit Before Tax sit in the accompanying investor and supplementary presentations. Group Domestic delivered $1.44 billion in Underlying EBIT, with Qantas Domestic revenue up 5 per cent on a 3 per cent increase in capacity and Jetstar Domestic earnings up 15 per cent on an 11 per cent revenue increase. Group International Underlying EBIT declined to $650 million, a figure the release footnotes as including, for Jetstar, Jetstar Australia international long haul, short haul and Trans-Tasman; Qantas International revenue rose 8 per cent on 7 per cent more capacity with premium cabin revenue up 15 per cent, and Jetstar International revenue rose 14 per cent on the same footnoted basis. Qantas Loyalty grew Underlying EBIT 12 per cent to $625 million.

The group ended the year with $13.3 billion of liquidity, including $3.3 billion in cash, $2.1 billion in committed undrawn facilities and $8.0 billion in unencumbered fleet and other assets, and net debt of $6.2 billion, which it describes as the middle of its $5.5 billion to $6.9 billion target range. Net capital expenditure totalled $4.0 billion, up 3 per cent, and capital expenditure for FY27 is expected to be between $4.3 billion and $4.6 billion. The board approved a fully franked final base dividend of $300 million, or 19.8 cents per share, payable on 14 October, in addition to the $300 million interim dividend announced in February and paid in April, and said the $150 million on-market share buy-back announced at the 1H26 results will not proceed. Around 25,000 non-executive employees will receive another $1,000 in Qantas shares. Seventeen new aircraft were delivered during the year with up to 31 more expected in the year ahead, the first Project Sunrise A350-1000ULR is due to arrive in April, and the A380 fleet will be gradually phased out from calendar year 2028. For the first half of FY27 Qantas expects Group Domestic total unit revenue and Group International total unit revenue each to increase by approximately 8 to 10 per cent against the first half of FY26, guidance the company says is aligned with its current fuel outlook and, for Group International, measured against a prior corresponding period that includes Jetstar Asia. First half FY27 fuel costs are expected to be approximately $3.6 billion including hedging, gross carbon costs and fuel transformation initiatives, on forecast consumption of about 16.3 million barrels and an assumed market jet fuel price of approximately A$200 a barrel excluding hedging, into-plane costs, sustainable aviation fuel and carbon credit costs. Qantas Loyalty Underlying EBIT is forecast to grow 5 to 7 per cent in FY27, and total group capacity, measured as available seat kilometres against the corresponding period in the prior year, is guided flat in each of the first three quarters of FY27.