By Sameer Manekar and Julie Zhu
Aug 27 (Reuters) – Australia’s Qantas Airways gave an upbeat revenue outlook on Thursday and said it would begin retiring its Airbus A380 superjumbos in 2028 after posting a 14% fall in annual underlying profit as fuel prices spiked.
The country’s flag carrier said it was in talks with Airbus and Boeing about converting 20 options to firm orders for A350s and 787s from 2030 because it would start replacing the superjumbos about four years earlier than previously planned.
“The A380s are now no longer in production, and so the cost of those aircraft over time will increase in terms of maintenance, but also the cost of disruptions that will come are also going to increase,” Qantas CEO Vanessa Hudson told reporters.
The new order would be separate from the carrier’s plans for “Project Sunrise” non-stop flights from Sydney to London and New York on a fleet of 12 specially designed long-range A350-1000s that will begin to arrive from next year.
Hudson’s comments came after the airline reported underlying profit before tax of A$2.06 billion ($1.48 billion) for the year ended June 30, slightly ahead of the Visible Alpha consensus estimate of A$2.00 billion.
Hudson said the year was “defined by two very different operating environments” as robust travel demand through much of the year collided with a surge in fuel costs driven by the Middle East conflict that reduced second-half earnings by A$420 million.
Higher fares, a reduction in domestic capacity and redeploying aircraft to stronger international routes only partially offset the headwinds from rising fuel costs.
Despite easing tensions in the Middle East, Qantas forecast jet fuel prices to remain elevated through the first half of the 2027 financial year, projecting net fuel cost to be about A$3.6 billion, compared with A$2.6 billion spent in the six months ending December 2025.
Nevertheless, the carrier projected domestic and international total unit revenue growth between 8% and 10% in the first half of the year, higher than the Visible Alpha consensus on both measures.
Shares in Qantas jumped 3% in early trading to their highest in a week, compared with a 0.4% decline in the ASX200 benchmark index as of 0020 GMT.
The airline said travel demand remained resilient, though it forecast domestic capacity would decline 3% in the first half while international capacity would rise 2%.
Qantas declared a final dividend of 19.8 Australian cents per share, and decided to scrap its A$150 million share buyback program announced in February, which it never began after the outbreak of the Iran war.
“Qantas delivered resilient earnings, maintained balance sheet strength, continued returning capital to shareholders and provided a constructive outlook,” Jefferies analysts said in a note.
($1 = 1.3935 Australian dollars)
(Reporting by Sameer Manekar in Bengaluru and Julie Zhu in Hong Kong; Editing by Jamie Freed)
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