Full Year 2026 Qantas Airways Limited Earnings Call Transcript
Key Points
- Qantas Airways Ltd (QABSY) achieved its highest customer satisfaction in a decade, with significant improvements in Net Promoter Scores across both Qantas Domestic and International.
- The company delivered a strong underlying profit before tax of $2.064 billion, demonstrating resilience despite a $420 million net impact from the Middle East conflict and higher fuel prices.
- The fleet renewal program is progressing well, with 29 aircraft added in FY26 and a clear strategy for the Qantas International fleet, including the upcoming Project Sunrise A350s, which is expected to deliver a $400 million earnings uplift by FY31.
- Qantas Loyalty continues to be a strong performer, delivering 12% EBIT growth to $625 million, with a clear pathway to its FY30 target of $800 million to $1 billion.
- The company's integrated portfolio and dual-brand strategy proved effective, allowing for rapid redeployment of aircraft to capture displaced demand to Europe, resulting in over 90% seat factors on key routes.
- Management provided a clear and confident outlook for H1 FY27, with strong travel demand and intakes, particularly in the leisure segment, supporting guidance for 8-10% group TRASK growth.
- Underlying profit before tax declined by $330 million year-over-year, and underlying earnings per share fell by 13%, impacted by the Middle East conflict and elevated fuel costs.
- The company has paused its $150 million on-market share buyback to prioritize investment in the business, signaling a more cautious approach to capital returns.
- Qantas is facing increased cost pressures, with total unit cost ex-fuel (TCASK) rising by 4.1%, driven by wage growth, industry costs, and higher depreciation from fleet investment.
- The company noted weakness in corporate and government travel demand due to economic uncertainty, which impacted the fourth quarter and is expected to persist into the first half of FY27.
- The retirement of the A380 fleet, beginning mid-2028, will incur significant entry-into-service costs and operational complexity, with the company expecting approximately $150 million in EIS costs in FY28 and FY29.
- The financial services sector's response to interchange rate changes is expected to impact Qantas Loyalty's earnings growth, with the greatest impact anticipated in the second half of FY27.
Good morning, and welcome to the FY26 annual results investor and analyst call. My name is Phillip Kidden, Group Head of Investor Relations at Qantas. I'd like to now hand over to Vanessa Hudson, our CEO, to take you through the results pack and introduce our group leadership team. Thanks, Vanessa.
Thank you, Phil, and good morning to everyone. Thanks for joining us here today on our group full year '26 analyst briefing. I'm joined by Rob Marcolina, our Chief Financial Officer, who will help me in presenting our results here in Sydney, but we are also joined today by the group leadership team as well. Today's briefing is going to be in audio format only, and Rob and I will take you through several of the key slides from the materials that we lodged earlier today. And also Cam Wallace, who is the CEO of Qantas International, will take you through a separate update on Qantas International. And then we
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