Qantas Group released their FY26 results last week, producing an impressive performance in the context of a global fuel shock and airspace disruptions resulting from the Middle East conflict. Profit before tax (PBT) came in at $2.1 billion, $330 million lower than last year in the face of a $610 million higher fuel bill (net of hedging).
The Middle East conflict caused more than just a fuel shock with shifting travel patterns and capacity resulting from airspace closures leading to higher revenues on some international routes that helped mitigate the shock. Qantas estimated a net negative impact of $420 million (i.e. less than the $610 million in higher fuel costs), suggesting that PBT would’ve increased in the absence of the conflict.
The top level numbers aren’t the most interesting part of the results, so we wanted to delve into a few things that stood out to us. Qantas is a vast airline group and it’s impossible to provide a comprehensive rapid or concise response to the financial result, so we’d rather focus in on a few interesting areas in detail rather than an overly broad and generic analysis. In addition to analysing the financial statements, annual report and presentations, we were also able to listen into the presentation and press conference, helping us provide a little more nuance.
We’ll be focusing on the performance of the various business segments with an emphasis on Jetstar and Qantas Frequent Flyer, revisiting fleet developments and capex, and finally looking at the impact of higher fuel prices.
Let’s delve in …