Qantas cancels $150m share buyback after taking big hit from US-Iran war sending jet prices soaring

Qantas has cancelled a planned $150 million share buyback after taking a massive hit from the Middle East conflict, which propelled jet fuel prices to record highs and trimmed its full-year profit.

The airline announced the on-market share purchase — which has the effect of pushing up earnings per share for investors — back in February along with a $300m interim dividend.

But a lot changed over the months that followed and Qantas confirmed on Thursday that the buyback would not go ahead.

“That was part of the capital surplus as we looked forward in February,” chief financial officer Rob Marcolina told a press conference in Sydney.

“We made the determination at that time. When we reassess that at this point in time, we’ve decided not to proceed.”

Chief executive Vanessa Hudson said it was very much a year of two halves, with demand growing across domestic and international networks to start with, followed by a fuel bill that was $610m higher than expected.

Qantas and its budget arm Jetstar responded to the fuel price surge by cutting capacity, announcing mid-April that domestic flights would be reduced by about 5 percentage points in the June quarter, later extending that through to September.

It also redeployed some aircraft to add more flights between Australia and Europe, as travellers bypassed the Middle East, and “adjusted” fares.

That response assisted the group’s hedging of Brent crude oil — which provided a huge $400m benefit — resulting in an overall net impact from the higher fuel prices of $420m.

“Despite these pressures, our operations and our people did not miss a beat,” Ms Hudson told reporters.

“Domestic had its best on-time performance in seven years.”

She said demand remained resilient as 2026-27 unfolded, but the company expects fuel prices will remain elevated through the first half.

The Flying Kangaroo reported statutory net profit of $1.29 billion, down almost 20 per cent, and an underlying result of $2.06b, down 13.8 per cent.

“Intention to travel is high, and the investments that we are making in our fleet, our product, our customers, and our people position us well for years ahead,” Ms Hudson said.

She was asked about an alarming string of near-misses at Sydney Airport, some involving Qantas and Jetstar planes, as Air Traffic Control struggles with staff shortages.

“We are continuing to be comfortable that the organisation and also the environment is safe to operate,” she said.

“It is important that we let the ATSB investigate. That’s an important part of the safety system, and we’re cooperating really strongly … and will absolutely take on board recommendations if they find them.”

She said the impact of the shortages had been “significant”, affecting the group’s on-time performance with 60,000 customers across July.

“We know that the ATC is looking at really improving that resource support,” she said.

“But they do need to address that because delaying that amount of customers - 60,000 across the group, but tens of thousands more across the industry - is not okay.”

Statistics in Qantas’ annual report showed it carried 55.945 million passengers last financial year, up from 55.901 million previously, while its fleet rose to 372 from 363.

The group will take delivery of 31 new aircraft this fiscal year including four for ultra-long haul flights between Australia and New York and London under its Project Sunrise operation, described as “the final frontier of aviation”.

Qantas had initially planned to buy 12 A350-1000s to operate the flights for delivery in 2023 but COVID-19 hit, pushing the target out to late 2025, then the end of calendar 2026.