Qantas shakes up Frequent Flyer Scheme as profit hits record $1.46b

Qantas says members of its loyalty scheme will soon be able to earn status credits without flying to help them earn flight upgrades and lounge access through everyday spending. Previously the 18.3 million members of its Frequent Flyer Scheme could only earn points via on-ground spending, but the airline said on Thursday that status credits will soon be earned to help members move through its Bronze to Platinum One membership classes. Soaring profitability at Jetstar helped the national carrier lifts its adjusted profit 5.1 per cent to a record $1.46 billion for the six months to the end of December. The group will pay a dividend of 19.8¢ a share and announced a share buyback worth up to $150 million as it boasted its customer satisfaction ratings are improving after a torrid few years of underinvestment. By the midway mark on the ASX, Qantas shares had lost 3.8 per cent to $10.24, though they have still advanced 15.2 per cent over the past 12 months. Fleet of new planes Chief executive Vanessa Hudson attributed the result to a new fleet of more efficient aircraft as the airline continues to undertake the largest fleet renewal in its history. “We’re already seeing the benefits from the next generation aircraft that are flying, which along with strong demand, our dual brand strategy and expanding Loyalty business, helped us deliver another strong result,” said chief executive Vanessa Hudson. The changes to the Loyalty program mean Qantas credit card holders and members of its partnership schemes will be able to earn an additional 140 status credits each year from the 10 separate categories offered on the ground. The new Gold status that offers unlimited lounge access will require 700 annual points to obtain and retain each year. “Our members have an incredible appetite for earning points, but we know that they also place immense value on their status,” Ms Hudson said. “Our most frequent flyers tell us that status retention is the single most important milestone as a member, with thousands achieving or retaining their tier every day,” Domestic strong, international flat Jetstar’s domestic operations saw underlying earnings befoe tax and interest jump 38 per cent thanks to strong leisure travel demand during the Ashes cricket series and summer holiday season, with the premium Qantas airline seeing revenue climb 5 per cent. Ms Hudson said the airline was “proud” to offer 50 per cent of its Jetstar domestic one-way airfares for less than $150 over calendar year 2025. Over the six months to December 31, Jetstar domestic in Australia and New Zealand carried more than 8.5 million passengers. Its international business benefited from strong demand for flights to Bali, Japan, and New Zealand, though adjusted group EBIT for its overseas routes, including longer-distant flights, fell 6 per cent as leisure travellers faced climbing ticket prices. Over the period Qantas also launched new international routes between Adelaide and Auckland and Sydney and Johannesberg or Sapporo in Japan. The airline also plans to offer a new flight route between Sydney and Las Vegas from December to March to service peak demand over the holiday season, saving up to five hours in flight time versus non-direct options. Warns on higher government fees Ms Hudson also warned the airline saw airport charges and government fees double the rate of inflation over the past 12 months in an outcome it said is making it harder to manage airfare inflation. IG Markets analyst Tony Sycamore said the fall in the share price on Friday is likely linked to investors worrying that its profit margins may shrink as certain costs outpace inflation. The airline is guiding for adjusted EBIT growth of between 10 per cent and 12 per cent over the 12 months to June 30. Its statutory profit finished at $925 million, up $2m on the prior year period. RBC Capital Markets analyst Owen Birrell said the airline’s dividend missed the market’s expectations, though the profit was better than expected, partly due to higher costs associated with cyber security investment and the closure of Jetstar Asia. The broker last had a $12 valuation on the shares and neutral rating.