Qantas' full-year profit falls 14% on fuel costs, to retire A380s from 2028

Aug 27 (Reuters) - Australia's Qantas ‌Airways reported ​a 13.8% ​drop in its full-year pre-tax underlying profit on Thursday, hurt by surging jet fuel prices due to ‌the Middle East conflict, and said it planned to start ⁠retiring A380 superjumbos from its fleet in 2028.

The country's flag carrier also ‌said it was in talks ‌with major planemakers Airbus and Boeing about converting 20 options to firm orders from 2030.

"With Project Sunrise and additional 787-9 deliveries ​confirmed from calendar year 2027, retirement of the A380 fleet will occur from calendar year 2028 to optimise capital efficiency ⁠whilst preserving network reach through the new wide-body fleet," Qantas said.

The carrier reported underlying ​profit before tax of A$2.06 billion ($1.48 billion) for the year ended June 30, compared with A$2.39 billion reported ​a year ago, slightly ahead of ‌the Visible Alpha consensus estimate of A$2.00 billion.

Jet fuel prices more than doubled and remained highly volatile ⁠in the second half due to the conflict in the Middle East. While Qantas hedged nearly 90% of its second-half exposure to crude oil, ⁠it still remained vulnerable to movements in jet refining margins.

Higher fares, a reduction ​in domestic capacity and redeploying aircraft to stronger international routes only partially offset the headwinds from rising fuel costs.

The carrier declared a final dividend ‌of 19.8 Australian cents per share, higher than the 16.5 Australian cents apiece declared last year. It ‌also decided to scrap its A$150 million share buyback program announced ⁠in February that it never ‌began after the outbreak ​of the Iran war.

($1 = 1.3935 Australian dollars)

(Reporting by Sameer Manekar in Bengaluru; Editing by Vijay Kishore and ‌Jamie Freed)

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