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Qantas has released its 2026 Annual Report, delivering a strong operational result despite the impact of the Middle East conflict and higher fuel prices.

Qantas reported a $2.064 billion profit for FY2026, down approximately $330 million
(14%) from FY2025. Most ratios were affected by the higher fuel costs, as shown in the
attached data.

The major factor behind the decline was the estimated $420 million impact of the Middle
East conflict and associated fuel cost increases. Without this impact, Qantas’ profit could
have been approximately: $2.06bn + $420m = $2.48 bn
This would have been slightly higher than FY2025’s $2.4 billion profit.

Profit was also reduced by costs associated with the closure of Jetstar Asia, the cyber
incident and class-action legal settlement. Qantas passed some of these higher costs on to customers through higher airfares, particularly on international routes, but this was insufficient to fully offset the increase in operating costs.

Qantas experienced strong demand, with revenue increasing by $1.6 billion (7.1%) to $25.5 billion. This indicates that the profit decline was largely due to external
factors—particularly higher fuel costs and the Middle East conflict—rather than
weaker demand or poor marketing.

Qantas continued its major fleet renewal strategy, taking delivery of 17 new aircraft in
FY2026 at a cost of approximately $3.97 billion. Fleet renewal represents a major short-term financial cost but a long-term strategy to reduce operating costs and improve competitiveness.

Newer aircraft provide:
 Lower fuel consumption
 Lower maintenance costs
 Greater operational efficiency
 Improved passenger experience

Qantas is also bringing forward the retirement of its A380s from 2028, further reducing fuel consumption and modernising its fleet.

Fleet renewal will continue at pace, with up to 31 aircraft expected over the next 12
months, including the Project Sunrise A350s, which will provide non-stop services to
London and New York.

The benefits are already evident. The new A321 uses up to 20% less fuel on comparable
routes, while Jetstar domestic earnings increased 15%, achieving a 16% margin, compared with over 11% for Qantas domestic and 3.7% internationally.

Despite the fall in profit, Qantas generated a strong $3.893 billion in operating cash flow,
providing funds for aircraft purchases, refurbishment, technology, customer improvements, dividends and debt management.

Qantas’ technology, restructuring and transformation programs generated approximately
$455 million in benefits during FY2026, improving productivity and cost control.

Customer satisfaction also improved, with Net Promoter Scores rising 7 percentage points domestically and 5 points internationally.

Qantas Loyalty was particularly strong, with revenue reaching $2.88 billion, profit
increasing 12% to $625 million, and Frequent Flyer membership growing to 18.9 million.
This provides Qantas with a valuable source of customer loyalty and revenue.

Source: Qantas bends executive bonus rules as it readies to retire A380 superjumbo fleet by Robyn Ironside The Australian Aug 27th .