Underlying Profit and EPS Growth
Underlying profit before tax of $1.46 billion for the half, up 5% year-on-year (increase of $71 million). Underlying earnings per share $0.68, up 7% versus H1 FY25. Operating margin for the group 12.3%.
Qantas Airways
· QABSY
February 25th, 2026
Summary
- Earnings Call Date:
- 2026-02-25
- Change Since:
- -4.29%
- Next Earnings Date:
- 2026-08-27
Earnings Call Sentiment
PositiveThe call presented a largely positive operational and financial picture driven by strong domestic demand, an accelerating fleet renewal that is already delivering measurable benefits (notably at Jetstar), rising EPS and operating cash flow, and enhanced shareholder returns (increased dividend and buyback). Material near-term headwinds were flagged for Qantas International and group costs — including engineering, entry-into-service costs, FX pressures and Same Job Same Pay — which are weighing on international EBIT and create execution and cost-management priorities for management. Overall, positive momentum in core domestic and loyalty businesses and clear fleet-driven upside outweigh the transitory and structural cost challenges highlighted.
Company Guidance
Qantas reported strong H1 results (underlying PBT $1.46bn, +5% y/y; underlying EPS $0.68, +7%; operating cash flow $1.8bn; net debt $5.6bn; net capex H1 $1.8bn) and gave forward guidance that Group RASK is expected to rise ~3% in H2 (Group International RASK +1%–3%), FY26 net capex is expected at $4.1–$4.3bn and FY27 at $5.1–$5.4bn (including the first four Project Sunrise aircraft), the group transformation target remains ~$400m for the full year (weighted to H2), entry‑into‑service/fleet transition costs are expected to increase by ~$20m vs H2 FY25, the gross impact of Same Job Same Pay for FY26 is ~ $95m (up $15m vs H2 FY25), Qantas Loyalty underlying EBIT is forecast to grow 10%–12% for FY26, net freight revenue in H2 is expected in line with H2 FY25, management expects seasonality to normalize toward a ~60/40 H2 skew, and the Board has approved an interim shareholder distribution of up to $450m (fully franked base dividend $300m, +$50m; on‑market buyback up to $150m).
Strong Operating Cash Flow and Capital Returns
Operating cash flow of $1.8 billion for the half. Board approved interim shareholder distribution of up to $450 million comprising a fully franked base dividend of $300 million (up $50 million) and an on-market share buyback up to $150 million; $400 million of dividends returned in the half.
Accelerating Fleet Renewal and Investment
Invested $1.8 billion in fleet and projects in the half; 18 aircraft joined the fleet (9 new). FY26 net CapEx guidance $4.1–4.3 billion, FY27 guidance $5.1–5.4 billion reflecting accelerated fleet renewal including first 4 Project Sunrise aircraft.
Jetstar Fleet Benefits Driving Earnings Uplift
Jetstar Domestic earnings up 38% with EBIT margin 22% (above target). New A321LR/A320neo fleet at scale; A321LRs contributed ~60% of Jetstar's earnings uplift through efficiency and higher utilization.
Group Domestic Outperformance
Group Domestic EBIT > $1 billion, up 14% year-on-year with an EBIT margin of 18%. Capacity grew 5% and RASK up 3%, underpinned by leisure and business purpose travel growth.
Loyalty Business Growth and Product Enhancements
Qantas Loyalty underlying EBIT $286 million, up 12% year-on-year. Points earned up ~10% and points redeemed up ~17%. Membership exceeds 18 million and member engagement (earning across 2+ categories) up 8%. Announced major program changes including status-credit rollover and ability to earn status via everyday spending.
Operational & Customer Metrics Improving
Qantas Net Promoter Score rose 5 points and Jetstar NPS rose 4 points. On-time performance Qantas 70% (highest among major domestic carriers) and Jetstar 71%. Frontline workforce increased 4% and multiple customer experience investments announced (lounge refreshes, WiFi rollout, cabin refreshes).
Balance Sheet Positioning
Net debt ended the half at $5.6 billion, at the bottom of the FY26 target range ($5.6–$7.0 billion), supporting capital allocation and shareholder distributions while maintaining the financial framework for low leverage and liquidity.
Filip Kidon
Good morning, and welcome to the First Half Financial Year 2026 Investor and Analyst Results Briefing. My name is Filip Kidon. I'm the Group Head of Investor Relations at the Qantas Group. I'd like to now hand over to our Chief Executive Officer, Vanessa Hudson, to take you through the results.
Vanessa Hudson
Thank you, Filip, and good morning to everyone. Thanks for joining us today at the Qantas Group Half Year 2026 Investor and Analyst Briefing. I am joined by Rob Marcolina, our CFO, who will be assisting me in presenting the results today, but I'm also joined by our entire leadership team. Today's briefing will only be in audio format, and Rob and I will take you through a number of the key slides in our materials that we lodged today, but then we will open to questions. We will start on Slide 4 of our presentation with our results highlight. This has been another half year defined by execution. Our focus continues to be on delivering for our customers, our people and shareholders. By delivering these strong results for earnings, we can invest in the largest fleet renewal in our history.
In summary, our underlying profit before tax for the half was up $71 million on last year. Our earnings per share at $0.68 was up 7%. Operating cash flow was strong at $1.8 billion, and we are delighted to announce that the Board has also improved an interim shareholder distribution of up to $450 million. This includes a fully franked base dividend of $300 million, an increase of $50 million and an on-market share buyback of up to $150 million. Our performance is driven by 3 factors: one, the strong d...
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