Qantas Airways reported an underlying profit before tax of A$2.06 billion ($1.48 billion) for the year ended June 30, which was approximately 3% ahead of Visible Alpha consensus estimates, according to Citi [1]. The airline experienced a notable 15% increase in premium cabin revenue for fiscal 2026, which was twice the growth rate of economy revenue [1]. This strong performance was accompanied by the unveiling of new business-class seats for its Airbus A321XLR fleet, featuring lie-flat beds and privacy doors, with the first of 16 aircraft expected to arrive in 2028. Updated business-class seats were also introduced for the new Boeing 787-9 Dreamliners [1].
Shares of Qantas jumped 4% on Thursday following the earnings announcement and product upgrades, reflecting investor confidence in the airline's strategy and performance [1]. Qantas noted that demand for international travel remained robust, with both Qantas and its low-cost carrier Jetstar increasing capacity and unit revenue. However, higher fuel costs weighed on international earnings [1]. International premium cabin revenue grew 15% in fiscal 2026, outpacing economy revenue growth [1].
Looking ahead, Qantas expects domestic and international unit revenue to rise by 8% to 10% in the first half of fiscal 2027, despite anticipated increases in fuel costs [1]. Citi maintained its "buy" rating on Qantas, citing the outperformance of Jetstar and the Qantas Loyalty program as key strengths [1].
CONCLUSION
Qantas delivered strong earnings and premium cabin upgrades, driving a 4% surge in its share price. The airline's robust performance in premium travel and positive outlook for revenue growth signal continued market confidence, despite rising fuel costs. Analyst sentiment remains favorable, with Citi maintaining a 'buy' rating.