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business
August 28, 2025
4 min read

Qantas Hits Record Profits Amidst Australian Travel Boom

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Qantas, Australia's national carrier, has achieved a remarkable financial turnaround, announcing its second-highest profit ever and sending its share price to a new record high. This significant rebound reflects a powerful surge in post-pandemic travel demand, strategic operational efficiencies, and a unique competitive landscape in the Australian aviation market.

A Sky-High Performance: The Numbers Behind Qantas's Success

On August 28, 2025, Qantas Group reported a statutory profit after tax of $1.61 billion for FY25, marking a 28% increase from the previous fiscal year. The airline's underlying profit before tax also saw a healthy rise of 15% to $2.39 billion. This impressive performance highlights the airline's resilience and its ability to capitalize on the robust recovery of the travel sector. Shareholders are set to benefit, with Qantas resuming dividend payments, including a base final dividend of $250 million and a special dividend of $150 million.

Key drivers contributing to this record-breaking period include:

  • Strong Domestic and International Demand: Both Qantas and its low-cost subsidiary, Jetstar, experienced sustained high demand across all market segments. Jetstar, in particular, carried a record 16 million domestic passengers.
  • Dual-Brand Strategy: The strategic use of Qantas for premium segments and Jetstar for price-sensitive customers has proven highly effective, allowing the group to cater to a broad spectrum of travelers and maximize revenue.
  • Cost Management and Operational Discipline: Despite rising costs in areas like airport charges and supply chain, Qantas demonstrated disciplined cost management and robust revenue growth.
  • Strategic Fleet Renewal: Significant capital expenditure, including an order for 20 Airbus A321XLR aircraft, signals a forward-looking strategy aimed at modernizing the fleet, improving fuel efficiency, and expanding regional capabilities.

The Competitive Landscape: A Duopoly in the Skies

While Qantas's financial results are a testament to its operational prowess, the Australian Competition and Consumer Commission (ACCC) has highlighted the role of reduced domestic competition in boosting airline earnings. The Qantas Group (comprising Qantas, Jetstar, and QantasLink) and Virgin Australia now collectively dominate the Australian domestic aviation market, accounting for a staggering 94.4% of all domestic passenger carriage as of March 2025.

  • Qantas Group's Market Share: The Qantas Group alone holds over 60% of the market.
  • Jetstar's Advantage: Jetstar has particularly benefited from a lack of low-cost competition, becoming Australia's sole low-cost carrier after the collapse of Bonza in April 2024 and the exit of Tigerair in 2020. This has allowed Jetstar to expand its market share and operating margins with minimal pricing pressure.
  • Virgin Australia's Performance: Virgin Australia has also reported strong profits, increasing its domestic passenger share to 34.4% as of March 2025, partly aided by other carriers retreating from key routes.

This market consolidation has led to concerns from the ACCC and the Australian Airports Association (AAA) about reduced consumer choice, flexibility, and potentially higher airfares.

Looking Ahead: Sustained Growth and Market Scrutiny

Qantas expects continued strong demand into the first half of fiscal 2026, projecting domestic unit revenue growth between 3% to 5%. While the airline's leadership remains optimistic about sustained growth, the intense focus from regulators like the ACCC suggests that the dynamics of the Australian aviation market will remain a key talking point. As Qantas continues to ride the wave of the post-pandemic travel boom, its ability to balance profitability with consumer satisfaction and regulatory expectations will be crucial for its long-term trajectory.

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