Qantas posted a 13.8% drop in full-year pre-tax underlying profit to A$2.06 billion for the year to June 30, as jet fuel costs surged amid the Middle East conflict.

Net profit declined 19.7% to A$1.29 billion, while revenue rose 7.1% to A$25.5 billion, reflecting resilient demand despite cost pressures.

Despite higher fuel costs, the carrier cited solid travel demand as a factor expected to bolster revenue in coming months.

Outlook remains positive on travel demand, with international travel showing continued strength and domestic demand holding steady.

The company indicated that additional information would be shared in upcoming updates.

Qantas is in talks with Airbus and Boeing about converting around 20 purchase-right options into firm orders from 2030, while planning to phase out the A380 from 2028.

The discussions with Airbus and Boeing also align with Project Sunrise and confirmed 787-9 deliveries from 2027.

Share buyback plans announced in April were paused, with about A$150 million of repurchases suspended.

Bulls point to improving macro conditions, a two-brand strategy (Qantas and Jetstar), and the Frequent Flyer program as backstops for earnings and cash flow.

The board approved a fully franked final dividend of 19.8 cents per share, payable mid-October, with a September 16 record date; about 25,000 non-executive staff will receive A$1,000 in shares under the employee plan.

Carry-on luggage charges will apply next year, with basic tickets including only an under-seat bag, a move the CEO says unbundles the product and gives customers more choice.

Credit card rewards reforms ahead of a ban on surcharges may affect the frequent-flyer points scheme, but the company still targets at least 5% program growth next year and earnings of about A$800 million by 2030.