The Qantas Airways Ltd (ASX: QAN) share price is in focus after the airline announced a huge profit and pleasing dividends.
Qantas FY25 half-year result
The airline reported its result for the six months to 31 December 2024. Here are some of the main highlights:
- 11 new aircraft during HY25
- Underlying profit before tax rose 11% to $1.39 billion
- Statutory profit after tax rose 6% to $923 million
- Underlying earnings per share (EPS) rose 21% to $0.63
- ‘Base’ dividend of $0.165 per share ($250 million)
- Special dividend of $0.099 per share ($150 million)
Divisional performance
Qantas reported that its group average fare increased 0.8% for its domestic segment and fell 6.6% for the international segment.
The domestic segment generated underlying EBIT of $916 million, international and freight underlying EBIT was $497 million and Qantas Loyalty saw $255 million of underlying EBIT. These are strong numbers, helping justify the Qantas share price.
In the domestic segment, demand for both corporate and leisure travel continued to grow, with the benefit of the return of more high-yielding business travel. It will continue to invest in its fleet, with seven new aircraft expected to arrive in the second half of this year.
International demand continued to grow, with an increase in demand for premium cabins across the international network. Qantas freight net revenue grew by 11% with capacity restored and fleet renewal delivering more freight capacity and unit cost improvements, coinciding with strong market demand and continued e-commerce growth.
Qantas loyalty saw membership rise 11% to 17 million. It was driven by growth in financial services, credit cards, retail and insurance. More than two-thirds of all points are now earned on the ground across more than 800 partners. Points redeemed grew by 6%.
Qantas dividend
The airline said the business has significant liquidity, including $2.3 billion in cash and $1.2 billion in committed undrawn facilities.
It said it has sufficient franking credits to start dividends, with the $250 million payout expected to be sustainable through the cycle.
Qantas believes the strength of its balance sheet and expected future growth in the business will continue to support the increase in fleet investment, ongoing customer and people initiatives, and future shareholder returns.
Outlook for the Qantas share price
The airline said it expects strong travel demand across the portfolio heading into the second half.
Group domestic unit revenue is expected to increase by between 3% to 5% in the second half and international unit revenue is expected to be flat.
Net freight revenue in the second half of FY25 is expected to be between $10 million to $30 million higher year on year.
The FY25 fuel cost is approximately $5.2 billion and the airline is targeting transformation of approximately $400 million to offset inflation, including both cost and revenue.
While the Qantas share price is 5% higher today, it’s largely recovering from the decline seen during February 2025.
I’m not sure how much more profitable Qantas can become in the short-term, but it’s pleasing to see it’s rewarding shareholders. However, increased competition from Virgin could be problematic.
