Qantas shares a hold as Jetstar excels, says Martin Currie's Chris Schade

Shares in Qantas (ASX: QAN) soared 13% at the market open after the national carrier posted its second-biggest underlying profit in history, at $2.93 billion, as passenger numbers jumped and its budget Jetstar business put in a star performance. 

The bumper result for financial 2025 enabled the group to declare total dividends of 26.4 cents per share including a special dividend, with the stock now more than tripling in value over the past five years and since the pandemic-era shutdown. 

Chief executive Vanessa Hudson vowed the group would invest between $4.1 billion and $4.3 billion in FY2026 on capex to help improve the ground and flying experience for customers. 

"Qantas and Jetstar carried four million more customers throughout the year, while our Loyalty business grew as frequent flyers engaged with the program more than ever before," said Ms Hudson. "Our strong financial performance is enabling significant investment in new aircraft and customer initiatives, helping deliver better operational performance and customer satisfaction across both airlines."

In this wire, we speak to Chris Schade, a research analyst at Martin Currie Australia, for his views on the result and outlook for Qantas. 

Schade says Jetstar was the standount performer in Qantas' results as consumers tilted towards value and a trend towards shorter haul international flights continued. 

He added Qantas remains in a "rosy" competitive position, although investors should watch this like a hawk for any signs of change. The airline's new planes are also performing well as the airline invests in a massive fleet upgrade cycle, the analyst said. 

Qantas' CEO said it expects to offer direct flights from Sydney to New York and London from October 2026. It also said it expects "ongoing strong travel demand" over the second half of 2025. 

Read on below for Schade's quick-fire question and answer session on one of the market's top performers today. 

Qantas (ASX:QAN) FY25 key results

• Total revenue up 8.6% to $23.8 billion vs consensus $23.9b
• Operating cash flow $4.3 billion
• Underlying profit before tax up 15.2% to $2.39b vs consensus $2.37b
• Statutory earnings per share $1.05, versus 75.9 cents per share FY24 
• Final dividend of 16.5 cents per share
• Special dividend of 9.9 cents per share
• Net debt $5 billion on 1.3x EBITDA
• Outlook net capex $4.1 billion to $4.3 billion, Qantas Loyalty underlying EBIT expected to grow 10%-12%

For more information and market data on Qantas, please visit Market Index. 

What was the key takeaway from Qantas' result in one sentence?

It's a business with momentum delivering for investors and that looks set to continue into the immediate future. 

Were there any surprises in this result that you think investors need to be aware of?

At a high level, not really. The positive surprise was that the travel demand commentary was a bit stronger than expected and that was supported by what they've seen in the first couple of months of FY26.  

That's in the context of it has been a bit choppy out there across the broader travel sector, but the reality is the Qantas business mix has seen it fair pretty well.  They're underweight the areas of issues and overweight the areas they benefit from, and are well placed to continue as the broader travel environment stabilises and grows. 

The strength [of the result] was all in Jetstar really so that outperformed most clearly. Loyalty did too but Jetstar is benefiting from the value-oriented consumers and shift to shorter-haul international travel which has been a feature of travel market recently. 

And then the other surprise is a special dividend albeit no buyback so you can debate whether or not it's a big surprise, but I think investors will be happy with that. 

Would you buy, hold or sell Qantas off the back of this result?

Rating: Hold 

Hold if anything I'm more in the trim camp. The [share price] reaction looks outsized versus the results and outlook which are broadly in-line, demand comments are a little better, but costs a little worse. We think there's travel exposures with much better risk-reward profiles.

But to be clear there's no impending doom the outlook still looks pretty good for Qantas. 

Are there any risks investors need to be aware of?

Costs is one thing to keep an eye on we saw them creep up a little.

There's question around whether their capacity and RASK forecasts are too ambitious but to be fair they're supported by the first couple of months trading. 

The key is the competitive environment now everything looks rosy but you need to always keep an eye on that. 

Then on the upside better than expected performance from the new aircraft as they go through a massive fleet upgrade program. 

From 1 to 5, where 1 is cheap and 5 is expensive, how much value are you seeing on the ASX today?

Rating: 4 to 5 

The market is toward the more expensive side it's had a good run over a number of years now. 

The unusual thing we see is the skew, so we see elevated value spreads and a big performance differential between stocks that have momentum and those without momentum.

So, we think there's a lot of opportunity in stocks with more attractive valuations and a good shot of regaining their operating momentum in the year ahead which fits well into our investing.