Qantas Profit Falls to Four-Year Low

The airline's pre-tax underlying profit of $2.06bn for the year to 30 June was its lowest in four years, as fuel costs rose.

Updated on Nov. 1, 2026 in Corporate Finance

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Would rising airfares and extra baggage fees change whether you fly this year?

Qantas reported pre-tax underlying profit of $2.06bn for the year to 30 June, its lowest result in four years, after fuel costs rose an additional $610m across its network. Revenue still increased 7% to $25.5bn.

Why it matters

The result shows how rising fuel costs are squeezing airline margins even as demand and revenue hold up. Qantas is responding by accelerating the retirement of its A380 fleet and leaning more heavily on ancillary fees and its loyalty program.

Jetstar generates over $1bn of its $6bn annual revenue from ancillary fees, and its median fare reached about $150, up from nearly $100 in 2022. The loyalty program contributed $625m in underlying earnings, with active members up 6%.

The players

Qantas

Qantas is Australia's largest airline and flag carrier, operating domestic and international services under the Qantas brand and the Jetstar low-cost subsidiary.

Stephanie Tully

Stephanie Tully is the chief executive of Jetstar, the low-cost subsidiary of Qantas, and has overseen the group's ancillary fee strategy.

The details

Qantas announced the results on Thursday and introduced charges for carry-on luggage storage in overhead bins on Jetstar. Jetstar chief executive Stephanie Tully signalled further expansion of ancillary fee initiatives, and Qantas shares rose more than 4% after the announcement.

2022: Median Jetstar fare was nearly $100.
30 June 2026: Qantas's reporting year ended with a pre-tax underlying profit of $2.06bn.
29 October 2026: Qantas announced its annual results.
2028: Qantas plans to retire its A380 fleet, accelerated from 2032.
2030: Qantas expects to begin purchasing up to 20 new aircraft and targets $800m in loyalty program earnings.

Market Landscape

Jetstar's ancillary revenue of over $1bn, out of $6bn in total, shows low-cost carriers increasingly relying on fees for add-on services rather than base fares. The median Jetstar fare rising from nearly $100 in 2022 to about $150 suggests this model is being applied as airfares climb.

Travellers booking Jetstar flights should expect carry-on luggage storage in overhead bins to carry a charge, and average fares have risen sharply since 2022. Frequent flyers may find loyalty points more valuable as Qantas targets $800m in loyalty earnings by 2030.

The takeaway

Rising fuel costs are pushing airlines toward fees and loyalty programs to protect profit, which means travellers are increasingly paying for extras that were once included in the base fare. Checking baggage and seat fees before booking can help avoid unexpected costs.