Qantas’ full-year profit falls 14% on fuel costs, to retire A380s from 2028

Australia's Qantas Airways reported a decline in its full-year pre-tax profit by 13.8% in August, primarily due to the impact of soaring jet fuel prices driven by the Middle East conflict. The country's flag carrier also announced plans to retire its A380 superjumbo aircraft from the fleet starting in 2028.

Qantas' pre-tax underlying profit for the year ending June 30 was A$2.06 billion ($1.48 billion), a decrease from A$2.39 billion reported the previous year. The profit figure, while slightly higher than the Visible Alpha consensus estimate of A$2.00 billion, still reflects the negative influence of rising fuel costs.

Despite hedging nearly 90% of its second-half exposure to crude oil, Qantas remained susceptible to fluctuations in jet fuel prices, which more than doubled and remained volatile during the period. The airline attempted to offset the headwinds by raising fares, reducing domestic capacity, and relocating aircraft to more lucrative international routes. However, these measures were not entirely successful in mitigating the financial impact of the fuel cost surge.

In a separate development, Qantas declared a final dividend of 19.8 Australian cents per share, an increase from the 16.5 Australian cents declared in the previous year. The company also decided to cancel its A$150 million share buyback program, which had been announced in February but never implemented following the outbreak of the Iran war.