Qantas and Jetstar delivered a solid underlying earnings result despite higher fuel costs, with the group posting $1.44 billion in underlying earnings as demand supported revenues.

International flights contributed $650 million of underlying earnings, down from the prior year due to elevated fuel costs, while Jetstar International expanded capacity by 11% and reported a 14% rise in revenue.

Management remains upbeat on travel demand, expecting continued revenue strength despite ongoing fuel-cost pressures.

The board decided not to proceed with an additional A$150 million on-market share buy-back that had been announced earlier in the year.

Qantas is in talks with Airbus and Boeing to convert about 20 purchase-right options into firm orders from 2030, part of a plan that also includes phasing out the A380 from 2028.

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

Qantas will pay a final dividend of 19.8 Australian cents per share to shareholders.

CEO Vanessa Hudson noted weaker business and consumer confidence in the final months of the year due to the Israel-Iran conflict and broader economic headwinds, weighing on travel demand.

Hudson attributed softer profits to the conflict and ongoing headwinds, with some corporates and governments tightening travel budgets.

She highlighted contrasting environments before and after the US-Iran conflict, noting the impact on confidence and demand in the year's closing months.

The company indicated more information would be provided in forthcoming updates.

Qantas introduced a carry-on luggage charge for next year, with basic fares including only an under-seat bag, describing unbundling as essential for customer choice.