Qantas has paid out bumper dividends to shareholders and announced it would buy 20 new aircraft after its before-tax profits rose by $300m to $2.4bn in the year to June
Australia’s biggest airline expanded its profit margin after holding ticket prices steady while fuel costs eased, its annual results showed on Thursday.
Investors bid up the company’s share prices in early trading, sending its market value up 8% to a record $18bn, double the capitalisation it enjoyed a year prior.
The airline paid compensation and penalties of $210m after the federal court found it illegally sacked workers. Its net profits still rose by a third to $1.6bn, even after accounting for tax, legal expenses and other one-offs.
Underlying earnings across the group rose more than $200m to $2.6bn, with budget alternative Jetstar narrowing the gap between its contribution and that of Qantas domestic flights for the third year in a row.
Earnings held at $1bn for Qantas domestic but rose from about $500m to $769m at Jetstar as it brought new planes into service and attracted growing numbers of customers in the year to June, two-thirds of whom paid $100 or more for their flight according to the company.
Sign up: AU Breaking News email
The group held ticket prices steady in 2024-25, with ticketed passenger revenue and ticket sales both rising by about 7%, reaching nearly $17bn from 56m tickets.
Costs fell for the second year in a row as fuel prices slipped, meaning air fares surged relative to the price of jet fuel, confirming analysis from the competition watchdog earlier in August.
Lower costs boosted the group’s operating margin over the year to 11.1%, up from 10.4%, with Jetstar growing its margin for the third year in a row to 13.7%, or as high as 16% for domestic flights, the company report showed.
The exit of Tiger Airways, Bonza and Rex had boosted the smaller player’s activity, Jetstar’s chief executive, Stephanie Tully, told investors on Wednesday.
Qantas’ group chief executive, Vanessa Hudson, said the group dominated two-thirds of Australia’s airline market and customer demand would continue to rise as business travel approached pre-pandemic levels.
“Zoom and Teams meeting have not ended the need for face-to-face business meeting,” she said.
Qantas’ frequent flyer loyalty program also delivered underlying earnings of over $550m – a 9% increase – after attracting a rising number of customers, who earned 222bn frequent flyer points but redeemed only 185bn of them over the year.
The surge in before-tax profits to $2.4bn saw the company announce $400m in dividends for shareholders, on top of the $400m payout awarded in February, which was the company’s first dividend payment since 2019.
Qantas also announced it would buy 20 new Airbus A321XLR planes to support the group’s 363-strong fleet as it retires its Boeing 737s, which the report warned would increase costs in the coming year.
Qantas has also criticised the Albanese government’s “same job, same pay” laws, which it said added $65m more in labour costs in 2024-25, a figure set to rise to $115m for the year 2025-26.
Net profit rises despite legal costs
The airline also saw increased costs on legal provisioning, which rose by $65m and a further $20m as Qantas prepared to pay penalties for illegally sacking ground staff.
The federal court in 2024 ordered Qantas to spend $120m compensating affected workers and then in August fined it $90m to deter other businesses from taking similar action, with Justice Michael Lee finding the airline was “the wrong kind of sorry”.
Hudson told reporters the company had learned lessons from the findings and apologised to the former staff.
“I am genuinely sorry for the impact that losing their job and the subsequent five-year legal process has had on them and their families,” she said.
“I won’t for a second pretend that the job is done, far from it, but the culture … will continue to change for the better.”
The Transport Workers’ Union was awarded $50m of that fine but Lee is yet to determine how much of the remaining $40m of the fine should go to the union or the sacked employees.
“I’m just trying to work out a fair way of doing this to get it to the people who need it most with minimum cost,” Lee told a hearing on Wednesday.
“These people will be in radically different positions … There will be people who are working next week and someone whose life has been completely destroyed.”
The penalty determination will return to court in September.
