Qantas has reported a mixed half-year result, with headline profit rising 5.1 per cent to $1.46 billion, slightly above expectations. However, underlying EBIT and net income fell short of targets, according to eToro market analyst Josh Gilbert. Qantas is Australia’s largest airline, operating domestic and international flights. The company also runs a popular frequent flyer program and other aviation-related businesses.
Gilbert highlighted the positive impact of new, fuel-efficient aircraft on Jetstar’s profitability, suggesting that ongoing fleet upgrades should bolster margins. However, he raised concerns about softening demand. Qantas has scaled back planned domestic capacity growth due to weaker-than-expected corporate demand. Gilbert noted that this is a key area to monitor, as corporate travel typically offers higher margins and serves as a reliable indicator of broader economic confidence.
Internationally, demand for economy services from Australia to the US has declined, even as inbound travel from the US to Australia has increased. Gilbert pointed to the role of a weaker Australian dollar and changing US economic conditions in this shift. The airline’s frequent flyer program stood out, delivering 12 per cent earnings before interest and taxes growth and remaining a dependable earnings driver.
Gilbert stated that the frequent flyer program’s consistent double-digit earnings growth is increasingly important to the investment case, especially when the core airline business shows minimal growth. The announced overhaul of the program indicates Qantas’s commitment to protecting its competitive edge. Following the mixed outlook, shares in Qantas experienced a decline of 2.3 per cent.
