By Sameer Manekar
(Reuters) -Qantas Airways on Thursday posted its second-best annual underlying earnings and announced the highest full-year dividend payout in 17 years, driven by strong travel demand across its offerings, sending its shares to record highs.
Shares of Australia’s flag carrier surged more than 12% in early trade to A$12.50 apiece. The airline was one of the best performers in the ASX 200 benchmark index, which was trading largely unchanged as of 0005 GMT.
Qantas’ budget arm, Jetstar, reported a 55% surge in earnings during the year, carrying a record 16 million passengers domestically as travellers battling high living costs snapped up cheap or discounted tickets.
Its international operations also reported 20% growth on the back of strong demand for its premium cabins, underscoring consumer confidence in its ultra-long-haul “Project Sunrise” non-stop flights from Sydney to Europe and New York.
“Qantas continued to benefit from the return of business-purpose travel with corporate travel almost back to pre-COVID levels domestically,” CEO Vanessa Hudson said.
The results come as Qantas works to rebuild its reputation after a string of damaging years since the pandemic. Earlier this month it was fined a record A$90 million for illegally sacking 1,800 ground staff during the pandemic.
But second-best annual earnings on record and historical shareholder returns signal a recovery taking place under CEO Hudson, the first female head of the airline, who took over in 2023 when it was still mired in a reputational crisis.
“Hudson inherited a mammoth challenge in balancing shareholder returns, rebuilding trust with consumers, and satisfying regulators,” Josh Gilbert, a market analyst at eToro, said.
“Just under two years in the job, and the results speak for themselves,” he said, adding that the return of the dividends was a “great way to keep investors pleased”.
Qantas announced a final dividend of 16.5 Australian cents a share and a special dividend of 9.9 Australian cents. Alongside interim distributions, the full-year ordinary dividend payout of 33 AU cents per share is the highest in 17 years.
Full-year special dividends of 19.8 AU cents are also being paid for the first time since fiscal 2000.
For the year ended June 30, Qantas reported underlying profit before tax of A$2.39 billion ($1.55 billion), beating the Visible Alpha consensus estimate of A$2.38 billion and above the prior year’s A$2.08 billion.
It was its second-best showing, only below fiscal 2023, when it reported underlying pre-tax earnings of A$2.47 billion.
Qantas also expects the strong demand to continue into the first half of fiscal 2026, guiding to a 3% to 5% growth in domestic unit revenue, compared with a 5% growth in the prior year.
The airline also placed an order for 20 additional Airbus’ narrowbody A321XLR aircraft as part of its broader ongoing fleet renewal program.
($1 = 1.5389 Australian dollars)
(Reporting by Sameer Manekar and Roshan Thomas in Bengaluru; Editing by Alan Barona and Stephen Coates)
Comments