Qantas Group HY25 Results ASX and Media Release

• The Qantas Group's Underlying Profit Before Tax increased by 11% to $1.39 billion for the half year ended December 31, 2024.
• Statutory Profit After Tax rose by 6% to $923 million.
• Underlying earnings per share increased by 21% to 63 cents.
• The Group will pay shareholders a fully franked base dividend of $250 million and a special dividend of $150 million.
• The performance was driven by strong demand across all customer segments and the Group's dual-brand strategy.
• Qantas and Jetstar carried almost 10% more customers.
• The Group invested in fleet renewal, adding 11 new aircraft and five mid-life aircraft.
• Qantas Loyalty performed well, with active member engagement and partner cash inflows growing by 11% and 18% respectively.
• The Group made a $1,000 thank you payment to 27,000 non-executive employees in December.
• Net debt remained at $4.1 billion as at 31 December 2024.
• The Group expects Group Domestic unit revenue to increase by 3-5% in the second half of the financial year compared to the previous year.
• Group International unit revenue is expected to be flat over the same period.

Score: 8

Explanation: The document presents a positive outlook with strong financial results, resumption of dividends, and strategic investments in fleet and customer experience. While challenges like cost pressures and supply chain issues exist, the overall tone is optimistic.

• Strong financial performance with increased Underlying Profit Before Tax and Statutory Profit After Tax.
• Resumption of shareholder dividends after several years.
• Strong demand across all customer segments.
• Successful dual-brand strategy.
• Fleet renewal and investment in new aircraft.
• Growth in Qantas Loyalty program.
• Improved customer satisfaction scores.
• Employee engagement is improving and attrition is declining.
• Progress towards sustainability targets.
• Strong liquidity position.

• Higher than CPI growth in airport and government charges.
• Constrained aviation supply chain driving higher engineering costs.
• Impact of Same Job Same Pay legislation on wages.
• Temporary costs associated with fleet transition, including costs as a result of aircraft delays, restructuring and fleet write downs were higher in the half.
• The impact of the Same Job Same Pay legislation and supply chain constraint affecting A330 fleet part availability and engineering are the main drivers of cost increases.

• Inflationary pressures and rising costs.
• Aviation supply chain constraints.
• Impact of Same Job Same Pay legislation.
• Fluctuations in fuel costs.
• USD strength.
• Delays in aircraft deliveries.

The Group expects strong travel demand across the portfolio heading into the second half, with Group Domestic unit revenue expected to increase by 3-5% and Group International unit revenue expected to be flat compared to the previous year.

• The Groups performance highlights the benefits of having both a premium and a low fares airline and a strong loyalty program.
• With a growing fleet of new aircraft, Jetstar went from strength to strength delivering a better experience for customers starting with the arrival of the A321XLR in the coming months.
• Were seeing progress from the investments we are making for our customers and people but we know theres more work to do to consistently deliver in the moments that matter.
• Australians have always loved to travel and continue to prioritise it over other spending options.
• Our financial strength means we are now in a position to pay our shareholders dividends for the first time in almost six years.
• The dedication of our people and the continued loyalty of our customers underpin our success, and I want to sincerely thank them.

The announcement reflects a broader recovery in the airline industry as travel demand rebounds post-pandemic, with Qantas leveraging its dual-brand strategy and loyalty program to capitalize on this trend. Competitors like Virgin Australia are also experiencing similar demand increases, but Qantas's strong financial position allows for significant fleet investment and shareholder returns.

• Qantas's return to dividend payments after six years is a positive sign, aligning with other major airlines globally that have resumed shareholder returns as profitability improves.
• The planned fleet renewal program, including the A321XLR and A350-1000ULR, positions Qantas to compete effectively with airlines like Singapore Airlines and Emirates, which also operate modern, fuel-efficient fleets.
• The growth in Qantas Loyalty mirrors the success of loyalty programs at other airlines like Delta and United, which generate significant revenue and customer engagement.
• Qantas's focus on sustainability initiatives, including SAF investments, aligns with industry-wide efforts to reduce carbon emissions, similar to initiatives undertaken by Air France-KLM and Lufthansa.

• Shareholders will benefit from the resumption of dividend payments and potential future returns.
• Employees received a $1,000 thank you payment and will benefit from investments in training and development.
• Customers will experience improved service and comfort through fleet upgrades and enhanced digital services.
• Suppliers may see increased business from Qantas's fleet renewal and operational growth.
• Creditors can be reassured by the Group's strong financial position and liquidity.

• Continue fleet renewal program with the arrival of new aircraft.
• Implement cabin upgrades on existing aircraft.
• Focus on improving on-time performance and customer satisfaction.
• Manage cost pressures and mitigate the impact of external factors.
• Progress towards sustainability targets.
• Continue to implement actions to address all of the 32 governance recommendations.

• December 31 2024: End of the half year period.
• June 2024: Group boarding was introduced on some domestic 737 flights.
• August 2024: The Qantas Board released a report following a review of key governance matters.
• December 2024: The Group made a $1,000 thank you payment to 27,000 non-executive employees.
• April 16 2025: Dividends will be paid.
• September 2025: The airline expects its first Project Sunrise A350-1000ULR to enter the final assembly stage.
• June 2025: Expected arrival of Qantas first A321XLR.
• Second half of calendar year 2026: Expected delivery of the first Project Sunrise A350-1000ULR.