Qantas Airways Aktie

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Great. Good morning, everyone. So I am your Board Chair, John Mullen, and welcome to the 2026 Qantas Annual General Meeting. The AGM is a very important event for Qantas and its shareholders. And on behalf of the Board, I'd like to thank you all for participating with you here in person or joining us online.

So before we start, let me introduce your directors. From your left we have Doug Parker, Alison Watkins, this is Alison's first AGM with us after joining the Board in March this year. So welcome, Alison. Antony Tyler, Chair of the Safety, Health, Environment and Security Committee; Dr. Nora Scheinkestel, Chair of the People and Remuneration Committee; General Counsel and Company Secretary, Kate Towey; Chief Executive Officer and Managing Director, Vanessa Hudson; Belinda Hutchinson, Chair of the Audit Committee; Dion Weisler, and Dr. Heather Smith. All directors up for election or reelection today will briefly address the meeting prior to the vote for their respective resolution. Also here today are David Richards and Scott Gus, the senior KPMG auditors, who are available to answer any specific questions you may have about the conduct of the financial year 2026 audit in relation to the Financial Report, the Directors' Report and the Sustainability Report.

So I'll start today's meeting with some opening remarks, and then I'll hand over to Vanessa for some brief comments. After Vanessa has spoken, we'll move to the formal business of the meeting, including voting on the resolutions to be put to the meeting and answering your questions. I'm pleased to confirm that a quorum is present and I formally declare the 2026 Annual General Meeting, therefore, open.

So good morning again, and welcome to the Qantas Group's 2026 Annual General Meeting. It's a real privilege to be here in Canberra, addressing you as board chair. It's fitting to bring the meeting of the National Carrier back to Australia's capital. In October 1946, 80 years ago, Trans Australia Airlines operated its first flight to Canberra, adding a stop in the capital to its Sydney-Melbourne service. This was 1 of the airline's first routes, providing a critical connection for politicians and the public service and those visiting this great city.

Great. In 1986, TAA rebranded as Australian Airlines, which then became a part of Qantas in the early '90s. Canberra's name is also flying on some of the most important aircraft in our history, including our first Boeing 747 and the first 747-400, which were both named City of Canberra.

So it's great to be here again, and I look forward to taking shareholder questions shortly.

First, I want to provide an overview of the year that we've had in the areas where we're focused and we'll be focusing on the year ahead and beyond. I'll then pass over to Vanessa to speak about the business in more detail before we take questions from shareholders.

So the 2026 financial year was a year that was split into 2 distinct periods. In the first 8 months of the year, Qantas and Jetstar both performed strongly with demand growing across our domestic and international networks and profitability benefiting from the arrival of more new aircraft.

Then from late February, just days after management posted our half year financial results. The conflict in the Middle East pushed fuel prices to record highs and globally aviation experienced significant disruption. Vanessa and the management team moved quickly adjusting fares and capacity amongst other things, which helped reduce the net impact on earnings for the year to $420 million despite a fuel bill that was $610 million higher than expected. The group would have had a record year if it were not for these events. And despite the very significant fuel impact on the group, they still delivered a strong underlying profit before tax of $2.06 billion, down $330 million only on the prior year.

Throughout the year, our dual brand strategy with Qantas and Jetstar was a real driver of value, providing choice for customers and resilience and the flexibility for the group as we adjusted our operations. Qantas Loyalty was a standout to growing underlying EBIT by 12% and providing earnings diversity, while the airline businesses carried higher fuel bill.

Delivering a $2 billion group profit in a year like this says a great deal about the value of our integrated portfolio. And importantly, despite the challenging end of the year, we also continued to improve the experience for our customers and our employees. Qantas was named Australia's most on-time airline for the eighth year in a row, and customer satisfaction reached a decade high as we continue to invest in product and service improvements. Jetstar also saw its Net Promoter Score improve as customers continue to benefit from its investment in technology, more new aircraft and the first of its refurbished 787s.

As I've spoken about before, the Board and management are committed to ensuring Qantas and Jetstar have the trust of our customers, shareholders and people. I know many shareholders will be pleased to hear about the performance alongside continued strong financial results. And all of this is helping to restore Qantas' brand, amongst customers and the broader community.

Qantas' brand reputation score, which is measured independently by Rep Track move back into the strong category for the first time in 4 years. A key driver of this improvement and the experience our customers are having with us as our new aircraft. The group is investing heavily in new aircraft across Qantas, QantasLink Qantas Freight and Jetstar.

And as we continue investing for the future, the Board is also pleased that we have been able to reward shareholders again through dividends this year. We returned $700 million in fully franked dividends to shareholders during the financial year. At the half year results in February, we also announced our intention to undertake $150 million on-market share buyback. The conflict and fuel volatility that followed absorbed the surplus capital that would have funded that. And given that change in conditions, the Board decided not to proceed with the buyback.

During the year, we also agreed to sell our 1/3 stake in Jetstar Japan, so we can redirect that capital into Qantas and Jetstar's core businesses here in Australia. Pending regulatory approvals, the sale is expected to be completed by June 2027.

And I would like to take this opportunity to again stress the importance of our financial framework. Despite challenging economic times on the largest fleet renewal program in the company's history, we are firmly committed to a conservative approach to debt by keeping our leverage low while also ensuring the reliability of dividends on an annual basis. Some airlines take a more aggressive approach, but we believe that maintaining a strong balance sheet is critical to an airline such as Qantas Group.

Now we couldn't have delivered these results without our people. And on behalf of the Board, I want to thank all of them for the resilience and commitment they have shown this year. Our frontline employees turn up to work every day, the environments where risks exist and keeping them safe. remains our #1 priority.

As we let you know at last year's AGM, tragically, a worker died at our Sydney Freight Terminal in September last year, and our thoughts continue to be their family, friends and colleagues. Qantas Freight conducted a comprehensive investigation and has made changes to its systems, controls and safety culture as a result. SafeWork New South Wales is conducting its own investigation and we are cooperating with them fully.

We also continued with our Board renewal during the year, welcoming Alison Watkins as an independent Non-Executive Director in March. Alison's executive and Board experience spans prominent consumer brands and some of Australia's largest businesses. She is standing for election today.

Belinda Hutchinson and Tony Tyler are standing for reelection, both joined the Qantas Group Board in 2018, and their experience has proved valuable continually through a period of considerable renewal at both the board and management level, and you'll hear from them shortly. We'll continue to add new talent to the Board, and I look forward to keeping you updated.

I'd now like to briefly speak to remuneration, which Nora will cover in more detail shortly. Now ahead of the AGM, the majority of the proxy advisers publish voting advice in support of all resolutions being labeled today. One proxy adviser, ISS, recommended against this year's remuneration report, and I would like to briefly address this now.

So as I mentioned before, until the Middle East conflict, the company was tracking towards a record result and management was likely to have received a maximum short-term incentive award or STI.

Despite management's prodigious efforts to reduce the impact, the increase in fuel costs beyond their control led to management missing the threshold level for their STI payout by just 1.7%, $36 million on a result of over $2 billion. Our Boards have a strong government responsibility, of course, but we're not supposed to be pleased when we're also charged with attracting, retaining and motivating top executive talent. And this involves making judgment calls on what is best for shareholders.

So in that light, while we have a strong track record of exercising negative discretion where this was warranted. Occasionally, it falls to a Board to exercise positive discretion as well. Qantas Management delivered an extraordinarily strong result FY '26 across almost all areas of performance and to zero out the entirety of their financial STI component because of external events over which they had no control, but worked extremely hard to mitigate. In our view, would have been demotivating to the team and very much against shareholders' interest.

For this reason, the Board allowed a small adjustment that while still far below what they would have received had fuel prices remained roughly in line with the pre-conflict level. Nonetheless, recognize the prodigious efforts made by management to still deliver a very strong result across almost all metrics.

I strongly believe that boards have a responsibility to use their judgment on all important matters, both positively and negatively, and not to simply follow preset guidelines or ignore the real-world context in which guidelines are set.

So in summary, the last year has been a period of progress despite material cost pressures and disruption that could have steered many organizations of course. Vanessa and the management team have done a terrific job in both managing the challenges and taking the opportunities that the year has presented. With our largest ever fleet renewal delivering increased value, a strong balance sheet and 1 of the world's best airline loyalty programs. The Board is confident that the group is well placed for the years ahead.

In closing, I want to sincerely thank our shareholders, customers and partners for your support over the past year and the teams across the group for their hard work. So I'll hand over to you.

Thank you, John, and good morning, everybody. It is great to be in Canberra for this year's Annual General Meeting. The city is so central to how Australia operates and we are incredibly proud to connect the nation's capital to more destinations than any other airline. Across Qantas and Jetstar, we operate more than 200 flights per week from Canberra to 7 towns and cities, supporting tourism, local business and connecting families.

Canberra is also where the Qantas A220 story began, an aircraft that's leading our domestic fleet renewal. Our very first A220 service connected Canberra and Melbourne a couple of years ago. And today, this city is home to the engineering hanger for that fleet. The 16th A220 is arriving in the next few weeks.

Before I talk to the year we've had, I want to also thank our people across the group. Over the past 12 months, I spent a lot of time in our operation across the country, onboard our flights in our hangers and crew rooms, our lounges and training facilities. It's always great to spend time with our team in their workplace to see their passion and to hear firsthand how things are really going. They are honest about where we can improve and about what we're doing well and most of all, their commitment to doing better for our customers shines through more than ever. That commitment across our business is what has allowed us to navigate a challenging year and build on the progress that we've made in the recent years.

Despite record fuel costs and disruption from the Middle East conflict, our operational performance has been world-leading. In June, Qantas was the most on-time major airline globally and has ranked in the top 5 in the world for on-time performance in 7 months of this calendar year. Thank you. Qantas has also achieved its highest customer satisfaction score in a decade. And Jetstar's customer satisfaction also improved. Our teams delivered this in what has been an uncertain environment with both airlines adjusting fares and capacity to manage the impact of significantly higher fuel price since February.

At the start of the conflict, Qantas redeployed aircraft from across our network to Europe-bound routes, adding around 16,000 seats to and from Europe during the fourth quarter as other carriers reduce their flying.

Leisure travel remained resilient with Australians continuing to prioritize travel over other discretionary spend items and big events like the recent footy finals have only added to that demand.

Qantas continued to see particularly strong growth in premium cabins with international premium cabin revenue growing by 15% during the year, twice the rate of economy. We also launched Qantas Economy with more leg room, priority boarding and more overhead locker space, which our customers are loving. And we kept investing in our lounges, refreshing our lounges here in Canberra and in 8 regional centers and opening a stunning new lounge in Auckland. Our redeveloped and expanded City International business lounge will open next month. And we are very excited to unveil some of the new features in this lounge, including an outdoor terrace with great views of the Tarmac.

All of this is resonating with customers. As John mentioned, Qantas' brand reputation score moved back into the strong category for the first time in 4 years. At the value end, Jetstar carried a record number of passengers, and kept fares low when many people are feeling the cost of living pressures. Almost half of our Jetstar customers flew for under $150 with fares as low as $29 New aircraft arrivals are also helping open new routes with 11 new connections added during the year, including Melbourne Colombo, which launched in August.

Growth into Asia has been particularly strong, with Jetstar having now refurbished 4 of our 787s, which are flying to destinations like Phuket and Seoul. This reconfiguration has a business class cabin, which is double the size, a new WiFi, they're all proving incredibly popular on these long-haul routes. And last month, Jetstar began flying from the new Western Sydney Airport, Australia's first major new airport in more than 50 years. We're so proud to be 1 of its early supporters, given it will create jobs, open up more opportunities to travel and support tourism growth in New South Wales but right across the country.

As John noted, Qantas Loyalty delivered another great result this year, showing just how valuable Qantas frequent flyer is to the group. Points earned and redeemed grew both by 9%, driven by strong engagement with our retail and financial services partners. And members booked a record 5 million flight rewards seats.

In recent years, we have focused on diversifying the program. giving members more reasons to join and engage with us outside of flying, and we're pleased that, that's reflected in the numbers. Today, we launched another points plan promotion. And from next month, members will be able to earn status on the ground. One of the most significant changes we've ever made to the program since its launch.

The reserve bank changes have now flowed through to banks and their credit card programs. Despite the questions being raised about the potential impact from these changes to the programs like ours, we have seen double-digit increases in the number of Qantas earning credit cards issued in the first quarter compared to a year ago. And we remain committed to our long-term targets for Qantas Loyalty.

Turning to recent trading conditions, which we provided an update to the market this morning. Conditions continue to be in line with the outlook we provided in August. And demand remains resilient as customers continue to prioritize travel. International demand remained strong across Qantas and Jetstar, supported by customers redirecting travel away from the Middle East.

Domestic leisure demand also remains strong. Non-resource corporate and government travel is stable, and we are continuing to monitor that closely.

Total unit revenue across the group international and domestic is still expected to grow between 8% and 10% for the first half. Fuel prices are expected to remain elevated through this financial year. With our fuel bill for the first half now forecasted approximately $3.75 billion, up from around $3.6 billion in the full year update that we gave in August. And we will continue to adjust fares and capacity in response.

While we manage these near-term pressures, we have not lost sight of the long term and we remain firmly committed to our investment in our fleet renewal. In April, our first project Sunrise aircraft arrives. And in October, we will launch the first nonstop flight from Sydney to London.

Our more than 100 years of history has seen incredible innovation at Qantas, from inventing the first inflatable escape slide to the first airline to introduce business class in 1979. Project Sunrise is the next innovation in our future. But our fleet renewal is far bigger than Project Sunrise. With over 200 new aircraft joining the Qantas and Jetstar Group, including 31 this financial year. More narrow-body aircraft for Qantas and Jetstar. And the first 4 new 787s for Qantas International arriving later in 2027.

We are also in discussion with Airbus and Boeing about converting around 20 of our existing wide-body options into firm orders from 2030 to bolster our international fleet as we gradually phase out our A380s from 2028. Our A380s have carried millions of customers and are a favorite amongst customers and our people. They will remain an important part of our fleet, and they will continue to fly for many years yet.

All of this investment is creating more jobs and more opportunities for our people. We've added over 4,000 new operational roles in Australia since 2023, with thousands more to be added over the coming years. This requires investment in skills, training and facilities. A few weeks ago, I was in Perth to open Jetstar's new cabin crew base. And in August, we opened our flagship emergency procedures training center in Sydney as we invest more than $100 million in new training facilities and simulators. And we continue with our employee share plan for its second year. More than 25,000 eligible employees have received $1,000 of Qantas shares, ensuring our people share directly in the group's success.

The pace of change in technology and AI is like -- unlike anything business around the world have ever faced, requiring them to rapidly transform how they operate and to keep pace with the changing expectations of our customers and workforce.

Standing still is not an option for us either. Alongside our fleet, we're already investing significantly in technology and AI because both are critical to our future. Three of our own team members built a tool recently that spots the flight that are most at risk of disruption each day. And it has helped lift our on-time performance significantly across both Jetstar and Qantas. In Adelaide, we have opened a product innovation center, which is growing to more than 400 roles, building the digital products our customers will use. We've made a start, and now we need to accelerate. That means getting the systems and data underneath right, and partnering on this journey will be critical so that we can move at speed with the scale of reinvention that is needed. We're very mindful of the risks that come with new technology, and we keep investing in the governance and the capability to manage them.

While higher fuel costs are a challenge, we showed that in this environment we could deliver a strong result while continuing to invest and deliver more for our customers, our people and our shareholders.

So many of our key operational and customer measures improved over the past 12 months. And that reflects the commitment across our operations to do more where it matters. And we have a lot to look forward to. Project Sunrise leads the way, and there are so many other milestones too. Today, we've announced Qantas flights between Sydney and Cape Town from November next year. Qantas' Sydney International Business Lounge reopens in December, and our new flights between Sydney and Las Vegas begin next month as well. Jetstar will bring on more refurbished 787s and across the group, we'll introduce new products and launch more flights to new markets.

There will be more opportunities for our people, and we'll keep growing safely and responsibly. So thank you for joining us today and for your ongoing support.

Thank you, Vanessa. Thank you. So we will now turn to the formal business of the meeting. And let me first outline the procedural matters for the meeting. As this is a meeting of Qantas shareholders. Only shareholders, their appointed proxies or authorized representatives are entitled to make comments, ask questions or vote. The Notice of Meeting dated 25th of September 2026 was circulated to members and made available on Qantas' Investor site. So I'll take that as being read.

Following consideration of the reports, I will then turn to general questions. Shareholders with queries relating to specific resolutions are requested to raise them at the time that the resolution is being considered.

If a shareholder has a specific customer-related issue, we have dedicated customer care representatives from Qantas, Jetstar and Qantas Loyalty with us today, and they will be available in the foyer after the meeting.

For any current or former employee shareholders present who wish to raise an employment-related issue, we have representatives from our group remuneration and Industrial Relations teams here today as well and they will be available after the meeting to address your specific questions.

So those in the room who would like to ask a question are asked to move to 1 of the microphones located in the aisles. And after providing your shareholder details to the attendant, please wait to be invited to ask your question. Only those with a voting handset or a blue nonvoting shareholder card are allowed to ask questions.

Shareholders who are attending online can submit questions about the online meeting platform by clicking on the messaging icon on your screen, selecting the item of business relevant to your question, typing your question and then pressing send. You can view your submitted messages along with any written responses by selecting my messages.

Online shareholders can also ask questions verbally by clicking on Request to Speak at the top right corner of the broadcast window. You will then be prompted to confirm your name and enter the topic of your question. Submit your request and follow the instructions to allow access to your microphone and connect to the queue. You'll be able to listen to the meeting on the audio line while you wait to ask your question.

Questions submitted online that are relevant to the business of the meeting will be read aloud to me by a Qantas staff member, and we may amalgamate questions if there are multiple questions on the same topic. And we will save answering questions specific to the resolutions until the relevant time. However, those joining us online are encouraged to start submitting their questions now.

At the time each resolution is considered, I will invite any questions specific to that resolution from the room and from online attendees to ensure that all shareholders are given a fair opportunity to ask questions.

I'll now summarize the voting procedures. All items of business will be voted on by poll, which I now declare open. If you did not cast your vote prior to the meeting and have not appointed a proxy to attend on your behalf, those attending online may cast a direct vote using the online platform or via the handset you were given if you're here in the room with us today. You may cast your vote at any time during the meeting.

For shareholders attending online, please click on the Voting icon and follow the prompts. To cast your vote simply select 1 of the options. Your selected option will change color and your vote is automatically recorded. There is no need to press a submit or enter button.

For those in the room, with the voting handset, please cast your vote for each resolution using the handset, use the trackball more to highlight the reason you want to vote on. You can vote by pressing the green square to vote for, the red triangle to vote against or the blue trackball to abstain. Once you've entered your vote, use the blue trackball to scroll to the next resolution.

For those voting online or in the room, you can change your vote at any time up until the time I declare voting closed. I also confirm that where undirected proxies have been given to me as the Board Chair, I will vote in favor of the resolution to the extent permitted.

During the meeting, we will display the votes received prior to the meeting on each resolution, but then the after discussion on the resolution. If there is any that has occurred. I know that some disagree with that practice and want the votes received made ahead of any discussion, but our view continues to be that shareholders should not be discouraged from asking questions on any resolution due to feeling that their contributional concerns will be moved based on the votes already received.

The final results will be lodged on the ASX as soon as they are available following the conclusion of the meeting.

If you experience any difficulties using the online platform, the help line number is displayed at the bottom of the online platform home page, along with other instructions on how to watch how to vote and how to ask questions.

MUFG Corporate Markets and Lumi Technologies are acting jointly as a returning officer for this meeting.

So now turning to the first item of formal business for the meeting, which is to consider the reports contained in the 2026 Qantas Annual Report and Sustainability report, both of which were made available to shareholders in August. The annual report contains the financial report of Qantas Airways Limited and its controlled entities, the directors' report and the independent auditor's report. The sustainability report contains Qantas climate statements and the independent assurance report. These reports have been approved by the directors in order to like Qantas' independent auditor, KPMG.

As required by Section 317 of the Corporations Act, I now lay before this meeting Qantas' annual report and sustainability report for the financial year ended 30th of June 2026.

Shortly, I will take any general questions or comments about the reports or any other general matters. As stated earlier, our auditors from KPMG are here available to answer any specific questions you may have about the conduct of the orders.

So with that, I'll now take questions from shareholders on the annual report, sustainability report the Qantas Group's performance over the past year or the auditor's report. So let's start with a few questions from those in the room and then we'll move to those attending online. Those attending online who wish to ask a question and have not yet submitted one, please do so now and those in the room who wish to ask a question, please move to 1 of the microphones.

Board Chair, may I please introduce Mr. Steiner.

Mr. Chairman, good morning, the CEO, a very good morning, both very welcome presentations. Thank you. I'm a shareholder, and I have questions about expenses. The Chief Executive referred to the sudden increase in fuel prices. My accent indicates I may not be originally born Australian. I've lived here for 52 years. I'm an Australian, who was born overseas. However, I am watching North America vigilantly. My question to you, Mr. Chairman, and possibly the CEO as well, relates to the highest expense item in our year report, which is fuel costs. I appreciate that they rose absolutely unexpectedly and you had to make adjustments, significant adjustments in your business, I'm an optimist. Let's assume that during the calendar not 2027 year, we will see reduction in fuel prices, not just flip flops that affect the market, but serious and continuing reductions. If that occurs, how long will it be before Qantas will be in a position to respond to that and as a long-term Qantas customer that I will benefit through realistic charges on the price I have to pay to fly?

Yes.It's a very topical question, obviously, in today's world. I think every $1 movement in a barrel of oil is a $50 million impact on Qantas given that we use some 5 billion liters a year, I think. So it moves daily. It's not something that we can look at over months and adjust it, it's literally daily. And the team have done an exceptional job, I think, of hedging in advance. We have 1 of the best derivatives teams I've ever seen in the industry to manage the hedging programs. If it hadn't been for the success of the hedging that was in place, the impact would have been much worse. I mean we've been over $1 billion if they hadn't had the hedging program that was in place. They're doing that again. We are well hedged now into the coming year. But to be specific, there are several components to the fuel price, the actual barrel of oil, which is what you see in the newspapers. There's also the refiners margin, which is very significant and has actually moved to a greater degree than the spot price of Brent oil. And that has gone from averaging $15, $20 a barrel for many years to over $100. Now as you can imagine the impact that, that has had on us.

So all I can say is that we've got a super team who are extremely focused on managing to those changes and reacting very quickly, whether it's adjusting capacity whether it's any other measures that the airline has to take. So we're not immune. I think we've probably done better than many airlines have, and we've been impacted less than many airlines, thanks to the planning the team put in but we're not immune. So it's very hard to tell you where we'll be in 3 months, 6 months or whatever.

You've let me confident that I can relax a little bit and be confident that your company, our company will continue to respond. I have a question with regard to income, and I note with great interest, the comments that the Chief Executive made about customer loyalty and new routes and that Qantas seems to have had some benefit with regard to Middle East transport. So what I want to ask is you haven't suffered as bad a reduction in passenger interest and performance. If conditions return to what I'll call normal and you can define that how you will, you have new aircraft you have new lounges, you have customer experience. Would you expect that there will be noticeable significant growth in Qantas passenger travel, both domestically and internationally, and I'm an international Qantas traveler.

Yes. Again, I can't read the future. but we were planning on a year of considerable growth this year, and we would have had such growth if it hadn't been for the events of the Middle East. Your comment on the Middle East is it's a positive and a negative in that, obviously, some of the reductions from Middle Eastern carriers in their capacity coming into Australia and some reluctance from customers to fly through the Middle East have benefited Qantas. But against that, it's our international flying that uses most of the fuel. So that's where the biggest cost impact has come, and it's disproportionately hit our international business over our domestic business. However, demand underlying remains stable. And even though we read in the papers every day about cost of living crisis, et cetera, the demand for travel has held up remarkably well. So I think once fuel does go back like you hope. We also hope, but once that does happen, I can definitely see us return it to growth.

Number 3, please.

Chair, may I please introduce David Brown.

Thank you, Mr. Chair. Firstly, just a comment or 2. One was thank you to the CEO for taking those matters that I raised last year, seriously. I appreciate that very much, and I enjoyed my subsequent trip to South Korea, which was much more relaxing and refreshing. Thank you. I must also say that your flights from Perth to Sydney and Sydney to Canberra yesterday were right on time, 5:00 in the morning and later in the afternoon. So our information there is correct. I didn't pay the $4,000 for a business class ticket that I enjoyed my economy.

Vanessa was at the airport, checking every flight yesterday.

I raise some issues in relation to Western Australia, see, I come from there. And I noted pleasingly that you had opened that new facility in Perth, I think, 2 months ago now. How many people will be actually working in that facility? And will that facility of training purposes, I believe, expand over the next few years. And also, what is the time line for the new Terminal 2 extensions, if it's called terminal to Firth Airport are going to commence work and also how long will it be? And are you keeping any of the existing Terminal 3 and 4 facilities operational?

So a lot of questions. You better have a go at that, Vanessa. Yes.

We are very excited about the investment that we are making in Perth, both the training facilities and also the investment in the new terminal. And the training facility that we opened, probably a couple of hundred people will be employed in that facility, but over 1,000 group employees will be trained in that facility. And the reason why it's such an exciting opportunity for us. This is the first time in the group's history that Jetstar and Qantas employees come together and train in the same facility. And we think that this is such a wonderful opportunity to create bonds and deepen our culture across both Qantas and Jetstar. And also our people now don't have to travel to the Eastern states for training, and they can do that in Perth. That's good for our people, but it's also good for our business because it actually cost us less. So that investment has been incredibly important. And it comes because of the fleet renewal that we've been talking about for Jetstar and Qantas. And Perth, over the coming years is going to be the biggest beneficiary of that investment Perth, in time will become our second largest airport hub on the Australian continent. And that's because these new aircraft that are coming have got a range and a capability that will enable us across Jetstar and Qantas to open new routes up into Asia from Perth into India, potentially more services into Europe and also into Africa. And so this is such an important part of our growth story that we've talked about. And so therefore, the investment in the airport that we are working with Perth Airport will come online a consolidated international and domestic terminal connected across the other side of the terminal. We will ultimately leave T3 and T4 precinct when that terminal comes online, which should be towards the end of this decade around 2030. And we have started and so the new runway has started and also the build of the new terminal has started.

Great. Have we got -- yes, Number 1, please.

Board Chair, may introduce Mr. Fraser.

Thank you. Thank you, Chair, for making it possible for us to ask questions. I've got it. I just like to comment on the point of high customer satisfaction. I was very pleased to hear that, that is going so well. I have 2 points then a question, 2 short points. One is in 2024, my wife and I traveled from Sydney to the U.K. A380 may I add. And when we arrived at the airport, having been unfamiliar with the latest technology and stuff introduced there for some years we were delighted to find a very client ground support person who just took us through everything. You got no idea. I would have liked to have think in writing, but I never got around to it. Anyway, that was terrific.

The other point is that a Qantas pilot was saying to me the other day that cabin crew are the unsung heroes of Qantas. And that's there's just 2 areas that are not people flying the aircraft as such, but shows the customer support I guess this is a reason for such customers for.

The question is, how is customer service -- customer support actually assessed by the Qantas system, please?

Well, firstly, thank you for nice comments. It's really good to hear from people who've actually experienced it. And I think Vanessa alluded in her short speech that on-time performance and also our Net Promoter Scores satisfaction are at like 7-, 10-year highs, which would have come in a rep track or reputational brand has improved up nearly back to where it was before things became difficult. So it's a huge progress being made there. Those are all measured by well-established international methodologies. So the wind overall, that's an independent organization that measures brand reputation. And in terms of the Net Promoter Score, every time you have an interaction with Qantas. You will be asked if you'd be willing to give a few comments on whether you would rate the outcome of the discussion that you had. So we try to measure both the actual experience that you have individually as well as the general perception of how good a job or about the job that we are doing. It's a very detailed and comprehensive system. Well, I don't see any more questions in the right now. So Alex, have we got some online ones?

Yes, Chair. The first online question is from Mr. Errol Montero, who asks what plans does want us have to balance growth with stability as Qantas shares seem to be extremely volatile?

Yes. Well, look, that's a super question. It's 1 that we will spend a lot of time on. Airlines, unfortunately are notoriously cyclical. I think it Warren Buffett, who said that the industry collectively hasn't made money since the Wright brothers, but if you pick the highs and lows, you can make a fortune. And that's a slightly flippant comment, but hardly more than a few years ever goes past without a fuel crisis or a COVID or something like that, which disproportionately hits the airlines. So that's why airline stocks are as sensitive as they are.

What we've been doing is to work really hard to establish more of an industrial company profile, a more dependable outlook. The main components of that are to sustain low debt, which, again, some airlines leverage themselves up, but some of our lines go brokers well. And we're not going to do that. So we keep conservative debt levels. At the same time, we're committed to paying a dividend. And again, some airlines pay a dividend in a good year and not in the bad year. We're trying to move to a more industrial company type profile, where you can depend on dividend every year, barring some terrible disaster, of course, but in the normal course of events, you can. So we're trying very hard by some of those measures to make Qantas will still be an airline will still be cyclical to a degree, but much more dependable than it's been in the past.

Chair. The next online question is from Mr. Chad Waldock who asks, when will Qantas open a long-haul cabin crew base in Perth?

I think Vanessa has just sort of basically answered that. Is there anything else we need to add on? I don't think there's any plan immediately for that?

I think the only thing I would say is that we are going to grow in Perth. We're opening up a new terminal, and we will constantly assess where the optimal place for us to have crew bases, whether that be Qantas or Jetstar, and it will be something that we continually evaluate as we grow.

Thanks, Vanessa.

Chair. The next online question is from Mr. Alejandro Martos who asks, are there any plans to resume the dividend reinvestment program, DRP, anytime soon?

Thank you. So we look at that every year when we're discussing and considering the dividend that we'll pay. There are conflicting views on that. Some people like it. Some people don't prefer to make their own decision. So at this stage, we're not planning to do that. But shareholders obviously have the ability to reinvest their dividend themselves.

Chair. The next online question is from Ms. Silvia Sharp, who asks when are shareholders going to receive access to reduced fares.

There are no plans to do that. But you did hear from Vanessa that over half, I think, of Jetstar's fares today are below $150 and some as low as $29. And then that's like digression, it's actually extraordinary. In the '80s, when I worked as an said, the airline industry then, a one-way flight from Sydney to Melbourne was $300 to $500. Today, you can do it for under $100, and that's in nominal dollars, not inflation-adjusted. That's actual nominal dollars. So it is far cheaper today to fly to Melbourne than it was in the 1980s when I joined the industry. Now I think as an industry, we have made travel affordable for everybody at a scale that no 1 would have ever guessed was possible in those days.

Chair, the next question online is from Mr. Max Nager, who asks, as a travel agent, it is difficult to represent customers and disputes with Qantas. Some disputes take far long -- too long to resolve. How does the Board determine whether a consumer dispute should be resolved promptly rather than prolonged through costly ongoing legal and administrative processes?

Yes, Mr. Nager, I think this refers to a specific matter that has been ongoing and has been the subject of extensive correspondence for some while. I don't really think it's applicable for me to -- it's appropriate for me to go into any detail here. But I would just comment, obviously, travel agents are a critically important good partners for us and like any well-run organization, we do have very best to resolve disputes and issues as quickly as we possibly can. This particular 1 has a lot of background and history to it that I can't go into here.

Chair, the next online question is from Mr. Yuan Davis, who asks, why does the group keep getting into trouble with staff pay problems?

Well, I'm going to say we don't keep getting into trouble with the staff pay problems. The Industrial Relations landscape at Qantas is very complicated. We have over 50 EAs, enterprise agreements. And I think we've resolved 12? 12, I think, Catherine, this year. And sometimes they're hard battles to get there. But what I can say is that I've had a lot to do with the union movement over the years and retain contacts with a lot of them. And while we will never agree on everything. I think there is now a dramatically improved relationship than there was some years ago. And I think both sides respect each other and try to arrive at sensible pragmatic, practical solutions for both employee and the company. The company has to watch its costs, has to manage an airline in a very difficult environment and employees, obviously, they have bills to pay, cost of living, et cetera. And so it needs a really cooperative effort on both sides to get there. While there will be the occasional issue, I think we're in pretty good shape there. Also, I would say that some of the industrial election that you read out at airports and things is actually not Qantas. It could be the security staff and others like that, and we sort of get caught up in that.

Chair, the next question is an audio question from Nikita.

Thank you, Chair. India is now Australia's largest overseas bond community and a key content growth market via Sydney. Single in passports with [indiscernible] are standard IPO documents across India and Indonesia. Yet in October 2026 and cascade, contest admitted its mandatory booking rules for single name passports airport kiosk to reject those passengers. Despite knowing all the passenger details in 1 including the fact that they carry single name passport, Qantas Direct Sydney terminal on economy passengers into kiosks guarantee to frame where staff that are not easily visible and the flow Health has had no queue since 2018, leaving elderly passengers waiting 84 minutes and Qantas argue they use the business class as a last result. I have 2 questions, Chair. Why does Qantas passengers in kiosk if no 1 in advance will fail that with no visible economy that of structure. Is the business class counter genuinely Qantas fallback policy for rejected economy passenger. And will you commit today to reviewing that case and process?

Okay. Look, I think I've got all of that as far as where this relates to a specific incident that occurred in the past where particularly due to enhanced security these days. Part of the security measures are to match the name in passports to bookings, et cetera. I know I've had that trouble myself with putting a child's -- grandchild nickname in rather than the real name and that causes a problem that happens in life. So I am aware of some of the background of what you're referring to. Obviously, we're doing very best to have personnel on hand, whether you're traveling in economy or business to help in those sort of situations. And I hope that won't happen again, but that's real life. Vanessa, did you want to add anything to that?

No, I think that, as you say, the security in the passport rules that we adhere to across the network can be complex. And I think on this specific item, we will look into the specific event to make sure that we're making the processes seamless for customers as possible.

Thanks, Vanessa.

Chair. The next question is an online question from Mr. Stephen Mayne, who asks did the chair read Alan Joyce's book? And what did he think of it? Were there any jarring public disclosures that he would have preferred were kept secret? In terms of it being an interesting and insightful read, did he find it more illuminating than Joe Aston's earlier book on Qantas called the Chairman's lounge. Also did CEO Vanessa Hudson learn much she didn't know reading Alan's book. Can she give any examples?

Are you serious? I have to confess I have not read Alan Joyce's book, and I actually don't intend to. When I became Chair, was some of my colleagues knew the past was a big issue. We acknowledge that. We have learned lessons. We have made many, many changes. But today, we're looking forward. So I'm really not looking -- they're not interested anymore in looking back and for past players to reinvent things and has back overall ground it's I think complete waste of time. So I don't intend to pay any attention to it. We're focused on in Qantas forward. I don't know if you want to come with you with it or not, Vanessa? Fine. Thank you.

Chair. Next question is an online question from Mr. Gary who asks, Chairman, this morning, you confirmed total unit revenue is still 8% to 10%, loyalty, 5% to 7%. And FY '27 CapEx now at the lower end of the $4.3 billion to $4.6 billion guidance. The only change is the first half 20's in fuel up to circa $3.75 billion, with 85% hedged if CapEx is under spending and revenue is up, why is the $150 million buyback still canceled and will the $115 million gain from selling your 1/3 share of Jetstar Japan be returned to shareholders?

So you commented on the first half, but the year is made of 2 halves. We've still got to get through the rest of the year, and we have projected very high fuel costs through to the end of the year. And we don't know where it's going to go. All we can do is base budgeting on the forward fuel curve in markets, and that may be better or worse when we get to the end. But we are also, as I tried to mention earlier, very focused on our financial framework of retaining low levels of debt, paying a dividend as well as committing to the most extensive re-fleeting a new aircraft in the company's history. We have a new airplane arriving every 2 to 3 weeks for many years to come. In that light, given that earnings have been less than we would have hoped or would have been the case without the fuel. We felt it prudent to preserve the liquidity that comes from the 2 events that you mentioned and to make sure that we can continue to respect our balance sheet and pay those dividends.

Chair, the next question is an online question from Mr. Robert Blair, who asks, Qantas has neglected Adelaide for international services over the years. I note that services to Auckland have resumed, but when will Qantas add more destinations. I would have thought that given the popularity of Japan services from Adelaide to Japan should be viable and there may be more destinations in Asia.

Thank you. Thank you -- yes, thank you for that question. It has been, and as you say, over, I would say, a decade the competition that has been phased from the group in Adelaide has resulted in us not being able to maintain a broad international network out of Qantas. A lot of that poor performance was driven by having the wrong aircraft in the fleet. And also now as we look forward with new aircraft coming, particularly the XLR and the A220, as we get more of these aircraft, this is going to give us choice to be able to look how to best deploy those aircraft across our network. We're delighted to have been able to put the A220 on Adelaide connecting New Zealand, and we see that there could be opportunity in the future. But as John was saying, we need to be very focused on the fleet renewal because having the right aircraft on the right route with the right configuration is the most important thing that we can do to sustainably grow and reenter markets like Adelaide.

Thanks, Vanessa.

Chair, the next question is an online question from Dr. Peter Lynch who asks, is Qantas committed to net 0 greenhouse gas emissions. Can you reassure shareholders that Qantas is pursuing all best practice possibilities to lower what are very high aircraft emissions of greenhouse gases. Is Qantas involved in researching alternative aircraft fuels, or relying on purchasing new aircraft with improved fuel efficiency?

So an emphatic, yes. We have short-term and long-term goals. First 1 was to reduce Scope 1 scope 2 emissions by 25% from 2019 baseline. I think we're halfway through that. What is really difficult in the aviation industry is the really are not alternative fuels available today at an affordable price. You'll hear a lot about sustainable aviation fuel staff, and that's where everybody wants to get to. But today, there isn't sufficient production of it. And if you can buy it, it's 2 to 3x more expensive than ordinary aviation fuel. So We've, I think, done a pretty good job. We've doubled our consumption up to 1.1% of our fuel, but it's still very small, obviously. What it means is a 3-way engagement by government, producers and by the user being the airlines unless there's adequate feedstock grown to produce it in the first place then we're not going to be able to buy it. And people won't grow it unless they know they're going to get paid for it. And an airline cannot afford put spares up by the level of cost that would be implied. So it's going to need support from government. It's going to need increased growing capabilities and some cost offsets. We're working towards that. I think everyone is where we want to go. We're working with the federal government looking at perhaps some level of mandated amount of staff that you need to maintain to operate in and out of Australia. That's complicated because foreign airlines won't have the same rules as us. If they've got a different access availability to fuel in their part of the world it's a different price to ours. It no longer have a level playing field, et cetera. So it's a very difficult conundrum. I think we'll definitely get there. I mean China is ramping up production of staff fuel at a higher rate of not -- in a few years, it will be available and hopefully at a price that we can all afford Today, that's still very difficult.

And the second part of your question, I think, was alternative other alternative fuels. And you'll hear and read about hydrogen. You'll read about electric aircraft. But to date, there is no -- neither of the major manufacturers have any credible plan in the short to medium term to produce aircraft capable of doing that. I'm not an expert, others know more than me, but the problem with hydrogen is the amount, particularly the amount of hydrogen you need to carry means that you wouldn't have any room left for passengers. And electricity, electric aircraft, I think you will see air taxis, carrying maybe 5 or 10 people from airport connections or things, but there's no realistic chance an electric aircraft being built to carry 350 passengers for 13 hours. So it's a very difficult space, evolving space, a lot of smart minds applied to it, but it's not going to be resolved anytime soon.

Chair, the last question online is from Mr. Philip Stack, who asks, I have always been proud to fly Qantas and a value the reputation and is built for quality and service. I would like to make it clear that I believe the cabin crew and their on burn service are generally fantastic. My concern is more about the overall passenger experience, particularly the cleanliness and tardiness of aircraft cabins, the presentation of the onboard environment and increasingly, the quality of the food being served. There appears to be a growing commentary, particularly among younger travelers and travel reviewers on platforms such as Facebook and YouTube that the overall experience is not quite living up to the Qantas name and the standards people have traditionally expected. My question to the board is, what is Qantas doing to address these concerns Particularly around cabin presentation, cleanliness and food quality. How is Qantas ensuring that the overall onboard experience continues to reflect the quality and reputation that the airline has worked so hard to establish.

Yes. Thank you. Thank you for the question. Firstly, I would say that while unfortunately, there are always going to be someone that has a bad experience from time to time. And the customer satisfaction scores that we are receiving an opposite to the trend you mentioned they're hitting all-time highs I think people generally are seeing that we're making improvements. But what we've been talking about for the last hour is the main driver answer to your question, if it's a 30-year-old aircraft or a 20-year-old aircraft, it's never going to be a smart and modern and clean as a new one. And although we are refurbishing some of the older ones that are still going to have some years of service, we're also bringing on brand-new aircraft at an extraordinary speed, as I think I mentioned before. And you're right. The cabin crew are the front line and they are absolutely what the customer sees, and we're very proud of them. They do a super job, but they're human too. They're on an old airplane that's not maybe the seat doesn't work and something never going to be as positive as if they're on a brand-new airplane where everything is spiking clean, it lifts all of our spirits. So I think the refurbishment, the rolling out of things like WiFi that was always a customer irritation and the brand new aircraft being delivered every 2 to 3 weeks is going to materially lift that reputation to another level again.

Chair, there are no more online questions in this section.

Okay. Good. I think we've got a couple from the floor. Number 1.

Board Chair, may I introduce Mr. Barber.

Good day, Chair, Board members. First I'm going to say and echo what people have said is I've been fortunate to fly quite a lot of Qantas this year and the service by the staff, unbelievable. So pay for that. My question and sort of flip 1 is, has Qantas considered the introduction of a shareholder here, not to introduce discounted fares, but aligned to say gold or platinum frequently benefits because I found having wisely moved from gold to platinum it maximizes time it provides additional benefits and something is fall is that any traveling frequently, either domestically or internationally, is a real saving just something you consider?

I think we take that on board. It's -- we've got, I think, 1 of the very best loyalty programs in the world. They're constantly revising it. I think this morning about extending status credits to non-flying inputs. It's reviewed all the time. So I can't say yes or no, but certainly, I hear you. Number 3.

Chair, may I please introduce Mrs. Morton.

I'm a bit shorter than that. My question is also related to customer service that somebody asked earlier. When you talked about customer satisfaction, I've been frequent flyer member for about 30 years and a platinum member for quite a few years. But in my experience, it's never been more difficult to get classic reward flights in anything other than an economy cabin. And I'm wondering if that factors into the assessment of customer satisfaction.

Well, to the last bit of your question, yes, if somebody dissatisfied that we'll go into the satisfaction score. I think that the loyalty program has taken some substantial steps including increasing the Classic Plus and other changes made to give more seats. The reality is we could fill every single airplane every day with reboard passengers and not get any revenue. Conversely, you could fill your head client with fair paying passengers do not have any room for points redemption. So it's a delicate balance that I think the team managed very well. And we're very conscious of the difficulties, particularly in kind of going to Europe and the European summer, it's when everybody wants to get to Europe. So we have to be judicious as to how we balance the supply and demand for those seats. And unfortunately, you're not always going to be happy, but I think they've made some very substantial improvements in availability just recently.

I don't know that I necessarily agree with that because, as I've said, I think it's never been more difficult pre-2020, it was really quite easy to get floods released. And to be frank, Classic Plus is really just a waste of points because the dollar to point ratio is just not worth it. It's not something that I would ever do. I'm sure some people do. But -- and I -- as a shareholder, I obviously understand the need for revenue and for paid flights. But I was just wondering if there's any plans to improve even, as I say, as a platinum member, we can ring up and we can ask for flights to be released. But I think my strike rate there is about 20%.

Well, I mean, without my Qantas set, I'm also platinum. And I have had similar issues to yourself in finding seats. So it's real. I get that. But I think -- now the team are very diligent in trying to balance the amount of capacity that's there. There are some times a year where there's a lot of capacity. Unfortunately, the peak times are the challenges, and that's when most people are asking. Vanessa, do you want to add any numbers to that?

I'd like to say thank you for your feedback. I think it's really important, and we do listen. We spend a lot of time with our Platinum and Platinum 1 and also all of our member getting feedback around availability. We know how much value is placed in classic redemptions, and we constantly are looking at access. And the 1 thing that we have done this year. And if you haven't seen it, have a look. We've invested in a significant new online engine because classic redemption seats are not just available on Qantas flights. They're available on Jetstar flights, and they are available on hundreds of our partner airlines. And the investment that we've made is in a new booking tool and engine online that gives a customer, every single classic seat available across not just our network, but our partner networks and a much easier way of being able to find where those seats are at any point in time to any destination at any time of the year. That launched in March, and it's -- I think it's a really important part of the tool because as we grow our frequent flyer program and membership base, we are increasingly going to be looking to our partners to be able to help in satisfying that demand in addition to classic Plus, obviously, as well.

If -- I've had another question, nothing to do with customer satisfaction. With in relation to the direct flight to London that launches in October, does that replace QF 1 and to, so that flight will still exist?

Yes.

No. But, Vanessa, do you want me to...

Yes. No, it doesn't replace the QF 1 and 2. There might be plans to naming conventions of the flight, but we see that through runner through Singapore is a really important and valued part of our network to many of our customers and adding the direct service from Sydney to London will be over and above that.

Thank you. Anyone, yes. Number 4.

chair, may I please reintroduce Mr. Steiner.

I'm so glad I come to these meetings, we learn so much.

So are we.

My question, particularly, I suppose, is to the presentation by the Chief Executive relates to AI. AI is very complex and it changes things almost without any teaching. You have to figure it out. With regard to the airline, I am wondering what areas of your operation have the greatest AI impact. Questions related to the whole reservation system and that is customer experience to the cockpit staff who I'm sure receive benefits of AI in terms of route planning and changes that may happen.

The second bit of AI relates to security. We're finding almost regularly stories about how artificial intelligence is used to break into this, to get access to that. And I'm interested in when I'm in the air, I can be confident that I'm going to stay there until I'm schedule talk to be in the air. When I'm a customer with Qantas and I'm paying for things, I want to make certain that my payment details stay with you and nobody else. But before you answer the question, I want to go back to the previous comment about frequent flyer points in classic I've traveled in the United States. I use frequent flyer points to access 1 of your major alliance partners there. It works all the time. When I fly Qantas, I have been enthused -- I've been smiling when I get upgraded. It happens on that 16- to 17-hour flight between Dallas and Sydney. That's the time you really want to enjoy the benefit of that. So I just want to catch on the back for that, but I need an answer to the AI question.

Okay. So look, I think the frequent flyer topic, we've exhausted. On the AI question, look, there's obviously no doubt in anyone's mind that every single 1 of us in this room are going to be impacted by AI 1 way or another, hopefully, positively, but it's the most extraordinary evolution of technology at a speed that no 1 has seen before. We obviously are -- is a large corporation in the forefront of that. I think, firstly, I would say that AI is probably particularly good at this stage in managing huge amounts of data and drawing out learnings, improvements from that. And airlines have more data than most people. As you referred to, booking systems, maintenance, every aircraft has extensive maintenance programs all being carried out. And AI is already proving dividends, showing dividends there in streamlining those procedures, reorganizing flight. It was a flight canceled or weather or something that doesn't just affect that 1 flight. It affects others where the aircraft is going multiple passenger movements, et cetera, AI is proving very helpful in reorganizing and coming up with a solution in the flash where human it would take a human schedule or some hours to do. So there's probably hardly an area of our operations that are not being impacted by AI 1 way or another.

On the security side, I think we heard Vanessa told us, yes, just yesterday in the Board meeting that we -- last year, we had 2.3 million attempted attacks per month this year. It's 2 billion attempted attacks per month on the airline system. I think that was the right figure which is a cerium, it's hard to even get your head around that level of attack and AI will obviously play a huge role. Unfortunately, the bad actors, but a huge role for companies to defend themselves. So we can never say never. I do think we've spent a lot of time investigating and listening to people who have deep levels of knowledge. Our understanding is that when in the air, the aircraft. Those systems are pretty well isolated from the ground. So it's very, very unlikely that we would have a malicious actor doing some with an aircraft in the -- but again, I mean, nobody -- I think this will be tuberous to say that we're not immune to attack. It's far more likely that we will be attacked in areas to mess us up reservation systems or as the stack we had recently. But we're spending a huge amount of time, money and effort on trying to stay as current as we possibly can with technology as it evolves. All right. I think that's exhausted the questions. Alex, there's nothing more online?

Nothing further online, chair.

Excellent. All right. Well, thank you, everybody, for your questions. Really appreciate that and enjoyed the debate. So if there are no further discussion on the reports, I will now move to the next item of ordinary business.

The second item of formal business for the meeting is the election and reelection of your directors. Alison Watkins offers herself for election at today's meeting. Belinda Hutchinson and Tony Tyler will be offering themselves for reelection today pursuant to the Qantas Constitution and the ASX listing rules. The Notice of Meeting and the 2026 annual report contain details of the background and experience of those up for election or reelection. And each director will address you shortly in turn ahead of the voting on their respective resolution.

So to kick off, I have the pleasure in moving the election of Alison Watkins. Alison was appointed to the Qantas Board in March 2026 as a Non-Executive Director. She's also a member of the Audit Committee and a member of the People and Remuneration Committee. The Board believes that Alison has outstanding leadership experience across some of Australia's largest and most complex businesses as well as the invaluable experience of helping to set Australia's monetary policy with the Reserve Bank. So I'd now like to invite Alison to say a few words.

Thank you very much, John. And if I could just apologize for my voice, I don't normally sound like this. Hopefully, it will get me through these brief remarks, but if not, my trustee colleague, Kate Towey has agreed to take over. So it's a privilege to be here and seek election Qantas board. And I think the Board for formally nominating me for the position of non-Executive Director. Many of you, I think, will remember, James Strong, who led Qantas through its merger with Australian airlines and its float in the mid-90s. I actually had the opportunity to work alongside James on the Woolworths Board for quite a few years at a time when he was also Chairman of Qantas. And like many I admired and respected James, he was approachable and down to earth. He always spoke about Qantas and Qantas people with prior and affection. And through James, I came to understand what Qantas really stands for everything that canteens to Australians and the responsibility that comes with this. Serving as a Qantas director is a responsibility that I would be honored to take on.

Much of my career has been -- I'm doing okay, aren't I?

You're doing great.

Yes. Much of my career. Okay, Kate?

I'm delighted to share Alison's remarks with you in her voice. Much of my career has been spent leading and governing large Australian businesses with complex like Qantas. My rural and regional connections give me a strong appreciation of the vital role Qantas plays for the communities. I currently serve on the boards of CSL and Wesfarmers as well as holding the role of Chancellor of the University of until earlier this year, I was a member of the Monetary Policy Board of the Reserve Bank of Australia. Through these roles, I stay close to what's happening in the economy and with the consumer as well as the broader geopolitical and technology focused -- sorry, forces shaping our future. I believe the Qantas Group is in a strong position under Vanessa's leadership and with the guidance and oversight of John and this board. And Alison would like to thank you for considering her election.

Well done. Great. Thanks, Alison. Thanks, Kate. So I now formally propose the following ordinary resolution that Alison Watkins AM, a Non-Executive Director, appointed by the Board with effect from the second of March 2026, pursuant to clause 6.5A of the Qantas Constitution and retiring in accordance with the Qantas Constitution and ASX listing rules. Being eligible, is elected as a Non-Executive Director of Qantas Airways Limited. The Board, with Alison abstaining, recommends that you vote in favor of this resolution. I'll now take any questions on Alison's election, starting with those in the room. Any shareholder who has a question on the proposed resolution move to 1 of the microphones. Looks like not. So you'll spared another agonizing response, Alison. Are there any questions online, Alex?

No questions online chair.

Great. Okay. For no further questions, I'll now turn to the details of the votes received prior to the meeting. On the screen are details of the votes received in advance of the meeting in respect of Alison's election. For those voting today, please cast your vote now if you haven't already done so. So congratulations, Alison, may you get better very soon. So thanks for making the effort for us, and it's very difficult.

Great. The next item is the reelection of Belinda Hutchinson as detailed in the Notice of Meeting as Item 2B. Belinda was first appointed to the Board in April of 2018. She is Chair of the Audit Committee, a member of the Safety, Health, Environment and Security Committee and a member of the Nominations Committee. The Board believes Belinda's extensive background in the financial services industry, together with her experience as a professional director, enables her to make a considerable contribution to the Board. So I'd now like to invite Belinda to say a few words.

Thank you, John, and good afternoon now afternoon, fellow shareholders. As John and Vanessa have highlighted, this past year, Qantas delivered world-leading operational performance the substantial lift in customer satisfaction, stronger employee engagement and a strong profit result, which supported the dividend, which was paid to our shareholders. That was achieved in a very difficult environment with geopolitical events driving record fuel prices and disruptive schedules. The credit clearly belongs to the management team and Qantas employees right across our network. There's been a real privilege to be part of the Board supporting them.

I'm seeking reelection because the work ahead matters and I believe I can continue to contribute to the Board and management to get it right. Qantas is undertaking the largest fleet renewal in its history and launching Project Sunrise. Together, this will shape the company's financial performance for many years to come. The fleet renewal involves major financial commitments, which I'll address shortly.

Projects Sunrise promises to overcome the urine of distance that has long challenged Qantas as the most remotely based long-haul carrier in the world. And its full strategic value will emerge as the program rolls out. Both will be delivered against an uncertain geopolitical and economic background and rapid technological change, including AI, which brands both risks and opportunities, as a global business, aviation feels those pressures more than most. In helping the Board weigh these matters like drawn a career spanning consulting at Accent Investment Banking at Citibank and Macquarie Group and more than 25 years on boards of some of Australia's largest customer-facing companies. Just as importantly, 8 years on your Board have taught me a great deal about this industry and that knowledge, I can continue to bring to the Board's determinations. As Chair of the Audit and Risk Committee, I work closely with management and my fellow directors to oversee financial risk, guided by the financial framework, which John outlined earlier. Risk management sits at the core and every successful business and nowhere more than in aviation. We cannot eliminate risk. What we can do is try to reduce it and limit the consequences when risks to eventuate. That is the committee's work, and that is work that I remain committed to I also serve on the Safety, Health, Environment and Security Committee. Alongside my fellow committee members, I'm focused on careful oversight as we bring new aircraft and routes into service. step up the training of our people and respond to the growing security issues facing the global industry.

This will be the last time I stand for reelection, and I thank you for the opportunity to serve on this board for the last 8 years. Qantas matters to Australia, and it matters to me, and I seek your support in continuing to contribute to your company. Thank you.

Thank you, Belinda. So I now formally propose the following ordinary resolution that Belinda Hutchinson AC, a Non-Executive Director retiring in accordance with the Qantas Constitution and ASX listing rules. Being eligible, is reelected as a Non-Executive Director of Qantas always Limited. The Board, with Ms. Hutchinson abstaining, unanimously support her election and recommend that you vote in favor of this resolution. I'll now take questions on Belinda's reelection. Any in the room? Yes. Number 1, please.

Mr. Chair, May I please introduce Mr. Bator. Chair, my question is not a commentary on either of the candidates. But a general question relating to tenure, the ASX corporate governance principles, et cetera, stipulate that well, do stipulate but suggests that people on a board for more than 10 years. This compromises their status as an independent director. A number of companies in the ASX comes have 1-year limits years typically. And of course, all the financial organizations, such as banks and then they have these tenure limits, does Qantas have tenure limits? And if not, why not?

We'll continue to guide as a framework. However, as always, there can be variances to the rule. And there's several reasons why we're very keen for Belinda to stay on. Firstly, she's an outstanding director. Second, she does an extremely good job of chain of the Audit Committee, but also most of us are very new. So there's been a huge amount of renewal at Qantas, both in executive and Board ranks. And just having a little bit of corporate memory from 1 or 2 people who have been here a little bit longer I think, is very wise. And Belinda can frequently comment on things that none of the others of us were there for. So I think it's well worth making an exception in this instance and asking Belinda to do another term. Nothing more in the room, whether looks of it. Alex, anything online?

Chair, there is 1 question online from Mr. Stephen Mayne, who asks why didn't we disclose the proxy votes to the ASX along with the formal addresses, which is what the Chairman does at Brambles. It allows for a more fully informed AGM debate and provides more timely disclosure to the market. Did any of the proxy advisers recommend a vote against any of the directors up for election today, and did this lead to any material against votes, if not well done on stabilizing the Board in terms of shareholder acceptance of its current composition. Also, as 1 of our longest-serving directors, is Belinda Hutchinson intending to serve a full 3-year term?

Okay. There are a few questions in there, if I remember correctly. So firstly, I think we commented earlier on why we don't disclose the proxy reports the votes in advance. And there are views both ways. There's no rifle wrong. I think we've landed on the fact that if shareholders -- shareholder wants to ask questions and feel they can influence a debate if they're looking at the votes up on the screen, saying 95% or 99% in favor, then there's a theme they might feel well, what's the point of even discussing it because it's a foregone conclusion. So that's why we don't put them up in advance, but I get that there's a body of thought the other way as well.

To your second question, no, none of the proxy advisers recommended against your appointment or reappointment of any of the directors. And we elect for 3-year terms. So Belinda is reelected for 3 years, he's reelected for a 3-year term, and she may well choose to vary back during the course of the term, but she is elected for a 3-year term. I hope that answers the question. Looks like no more in the room, Alex, anything else online?

No further questions online chair.

Great. So if there are no further questions, I'll now turn to the details of the votes received prior to the meeting. You can see those on the screen now and the detail of the votes received in advance of the meeting in respect of Belinda's reelection. For those voting today, please cast your vote now if you haven't already done so. So congratulations, Belinda.

The next item is the reelection of Tony Tyler, detailed as Item 2 in the Notice of Meeting that Tony was first appointed to the Qantas Board in October 2018. He is Chair of the Safety, Health, Environment and Security Committee and a member of the Nominations Committee. The Board believes that Tony's depth of experience in the global aviation industry, including senior executive leadership roles and service on airline boards together with his deep understanding of Asian markets, enables him to continue to make a significant contribution to the Board. I'd now like to invite Tony to say a few words.

Thank you, Chair, and thank you to our shareholders for the welcome today. It's a privilege to be here in Canberra for another Qantas AGM and to seek your support for my reelection to the Board.

This past year has tested airlines all around the world. The conflict in the Middle East saw the price of jet fuel double and forced carriers to act quickly to manage the impact while keeping their customers and people safe. I spent more than 40 years in aviation, including as Chief Executive of Cathay Pacific. And today, I sit on the Board of Bombardier, BOC Aviation and Transmeridian Airways. With these roles, I bring both experience and diverse insights, which provide perspective to the challenges and opportunities facing aviation. I know how quickly conditions can change. and how hard it is to respond while maintaining operational performance, and I think this experience is valuable in my role as a member of the Board. I want to acknowledge the work our frontline teams have done over the past 2 years, in particular, to lift performance across our business. We're seeing it in the operational customer and reputation results, and I hear it in the conversations I have when I travel here. And that improvement is a credit to our people, including Vanessa and the management team. They're committed to building on it and serves the Board.

Qantas holds a place in this country that very few airlines hold anywhere in the world. Keeping the trust of our customers, our people and our shareholders is work but never finishes. And I would welcome the opportunity to keep contributing to it. So I respectfully ask for your support to my reelection. Thank you.

Thank you, Tony. So I now formally propose the following ordinary resolution that Anthony Tyler, a Non-Executive Director, retiring in accordance with the Qantas Constitution and ASX listing rules being eligible, is reelected as a Non-Executive Director of Qantas Airways Limited. The Board, with Mr. Tyler abstaining unanimously support his reelection and recommend that you vote in favor of this resolution. I will now similarly take questions on Tony's reelection. I don't start with any in the room? I don't see any. Alex, anything online?

No questions online, Chair.

Great. Thank you for no further questions, I'll now turn to the details of the votes received prior to the meeting. On the screen such details of the votes as received in advance of the meeting in respect of Tony's reelection. For those voting today, please cast your vote now if you haven't already done so. Congratulations, Tony.

So before considering the remuneration-related resolutions, we'll hear a few remarks from Dr. Nora Scheinkestel, who is Chair of the People and Remuneration Committee on Qantas' approach to remuneration and this year's remuneration report. During her address, Nora will specifically deal with the remuneration-related themes emerging from discussions with shareholders and the questions submitted in advance of this meeting.

So I'd now like to invite Nora to address the meeting.

Thank you, Chair, and good afternoon, everyone. As John indicated, I will speak briefly about Resolution 3, the remuneration report. And I will also address the long-term incentive grant to our CEO of Vanessa Hudson in Resolution 4.

Our remuneration structure supports our business objectives. Put simply, pay should follow performance, and it should reflect the experience of our shareholders, customers and employees. We set clear measures at the start of each year to capture this. But formulas don't always give the right answer. At the end of the year, the Board must stand back and assess if the scorecard results appropriately reflect this principle and if not, use its judgment. Sometimes, that means reducing pay. Sometimes, it means recognizing results that the formula would disregard. And this year, we did both, and I'd like to explain why.

As the Board Chair and CEO have said, this was a strong year in a difficult environment. The conflict in the Middle East drove fuel costs sharply higher. In gross terms, as John mentioned, the fuel crisis had an impact of over $1 billion on the group through our well-established and active hedging program, management reduced this impact by $400 million. And then through further management actions, network changes, adjusted capacity and raised fares. They further reduced the hit by approximately $200 million to an impact on profit of about $420 million, delivering an underlying profit before tax of just under $2.1 billion, and they did this while also delivering for customers.

Again, as you've heard today, Qantas Domestic had its best on-time performance in 7 years and its highest customer satisfaction in a decade. Our reputation is back in the strong category as measured by our Rep Track score. And employee engagement rose to 72%, though we know there is more to do.

So let me now turn to how that played out in the short-term incentive scorecard. Half of the short-term scorecard is allocated to underlying profit. Threshold and target hurdles for this metric in FY '26, was set above the previous year levels well before the Middle East will begin. Over the first 3 quarters, the group's performance was in line with or ahead of target before the closure of the Strait of Hormuz materially affected the fourth quarter. As I said earlier, the gross increase in fuel costs, which then hit the group was in excess of $1 billion, and management reduced this impact to $420 million while at the same time, maintaining team engagement and industry-leading operational and customer experience.

The group delivered underlying performance profit before tax of $2.064 billion, only $36 million or 1.7% short of the $2.1 billion threshold for the group financial measure. Actual revenue and other income for the year grew over 7% to $25.5 billion, and the group achieved record customer satisfaction and best on-time performance in 7 years. Given that $36 million or 1.7% miss, on a strict application of the formula, 50% of the short-term incentive would not have been paid, even though the result was strong, both on financial and nonfinancial metrics, and management had materially mitigated the financial impact of the fuel shock. The Board considered that would not have been the right outcome. We specifically retain discretion so that at the end of the year, we can stand back and assess whether the scorecard appropriately reflects a year. We take in the totality of factors. Here, the strong financial result management's actions, the balanced scorecard performance, the very small miss to threshold and our obligation as a Board to attract, retain and motivate a high-performing management team. It would not have been in either the executives or shareholders' interests to have zeroed out 50% of the scorecard. And it would not have been consistent with the objective of paying for performance. We, therefore, exercised discretion to award the threshold outcome, 25%, which we considered a proportionate response to a narrow miss driven by significant external factors. This is the first time that the Board has exercised positive discretion since the Board was reconstituted under our Board Chair, John Mullen, we've shown we are prepared to exercise downward discretion when required, having made material downward adjustments in the last 2 years. And again, this year, which I'll turn to now.

Safety remains a key priority. And as mentioned earlier, tragically, during the year, a contractor was killed in our freight operations in Sydney, and we again extend our sincere condolences to his family, friends and colleagues. A full investigation was carried out and safety improvements were immediately put in place following consultation with our employees and unions. We believed that no reward for workplace safety was appropriate in a year when a contractor lost their life at work. And we made that adjustment by zeroing out the workplace safety component of the short-term incentive scorecard, which amounts to 5%. On actual performance, it would have added 4% to the total scorecard result. Executives with more direct accountability for the area had more substantial downward adjustments made to their remuneration.

So after both adjustments, the scorecard outcome is 49% of maximum or 79% of target, the CEO's STI award for the year was $1.3 million, 35% lower than last year's outcome. And STI outcomes for the aggregate executive team were 32% lower in total than last year. The Board believes these adjustments reflect a result which is fair to our executives while reflecting our values and shareholders' experience. We did consider whether we should change our approach to the financial metrics for the coming year, given the continued war in the Middle East and ongoing elevated oil prices. One alternative might have been to exclude the impact of oil prices, but we decided against this as management's ability to manage oil price risk is key to protecting shareholder value. We therefore kept the same profit metric for this year. But if fuel prices again have an excessive impact on profit positive or negative, we will consider whether using discretion is appropriate. One other matter that I'd like to mention is that the profit metric is based on underlying profit where certain one-off items are excluded in order to give a better indication of how the underlying business is performing. We have a set of principles that have been developed by the Audit Committee to determine which items to exclude, and we followed these principles again this year.

The People and Remuneration Committee then considers whether it should exercise discretion to add back any of those items for remuneration purposes. 2 cost items, in particular, were reviewed, but no discretion was exercised to add them back. The first related to costs associated with the July 2025 cyber incident and the second related to the settlement costs for the Qantas Cover flight credits class action. The Board has already exercised negative discretion in relation to both of these incidents, reducing executive pay in both FY '25 and FY '24. And we did not consider that any further adjustments were required.

Turning now to the long-term incentive plan and the 1 with the performance period ending on 30 June 2026. This is vested at 89%. Over 3 years, total shareholder return which is the share price gain plus dividends, was 64%. That placed Qantas in the top 1/3 of our global airline peer group and the top quarter of ASX 100 companies. The reputation metric introduced 3 years ago was tested for the first time this year. And we were delighted that we finished the year with a Rep Track score of 74 in the last quarter, which put us back into the strong category, resulting in just over 76% vesting for this tranche. There are a few changes that we'll be making for next year. As I just mentioned, the reputation measure which was added to the long-term incentive plan in 2023 was introduced to demonstrate both internally and externally, how seriously the Board took the need to repair the damage to Qantas' reputation. It was added so that each LTI metric was evenly weighted at 1/3 of the opportunity. The Rep Track metric was not intended to be a permanent addition.

Given the good progress already made last year, we reduced the weighting of the Rep Track measure in the 2025 LTI grant to 20%. This year, with our reputation back in the strong category, we've decided to remove the measure completely from future LTI grants. The Rep Track measure will still be tested in the 2 LTI grants that remain on foot and performance on reputation will also be gauged through the customer and employee metrics in the STI scorecard. The new LTI grants will return to the 2 measures of shareholder return. The first, which compares Qantas with a global airlines peer group and the second, which compares Qantas with ASX 100 companies, and each is weighted as 250%. We will consider whether an additional financial measure should be added in future as the fleet renewal program matures and capital expenditure normalizes.

I will now turn to Resolution 4, which asks you to approve this year's long-term incentive grant to our CEO and Managing Director, Vanessa Hudson. Each year, we ask you to approve the CEO's participation in the long-term incentive plan. This involves granting equity securities to the CEO, rights, which will vest into shares if performance conditions are met. Under the ASX listing rules, we strictly only need to secure approval if the securities are issued rather than bought on market. We currently intend to buy any shares required on market, but we seek your approval because we think it's a better practice and it preserves flexibility should something unexpected to occur. The additional aspect, which I want to bring to your attention this year is that we are increasing the CEO's maximum opportunity under the long-term incentive plan to 250% of her fixed pay. If you approve this she will receive 411,000 share rights. But only if performance conditions are fully met, will she received the equivalent number of shares.

Since Vanessa became CEO, her fixed pay has risen by about 3% a year. It is now $1.75 million. When we compare her pay with roles of similar size and complexity and took her performance into account, her total pay was well below market. We could have increased or guaranteed fixed pay but we chose not to. Instead, we've put more of her pay at risk. She will only benefit if shareholders do well over the next 3 years compared with other airlines and with ASX 100 companies. Nothing vests if Qantas is in the bottom half of those groups. Any shares that she earns after 3 years must then be held for another year, and the Board can claw them back if needed. In short, she only does well if you do.

So to sum up, pay follows performance. The Board uses its judgment in both directions to ensure the outcome is consistent with this objective. We hold management to account through the judgment applied in setting the metrics and in exercising discretion if we think strict adherence to the formulas doesn't deliver the right result. We hold ourselves to account by bringing these judgments for your consideration today. The directors, excluding the CEO recommend that you vote in favor of Resolutions 3 and 4.

And I'll hand back to John now.

Great. Thank you very much, Nora. So the next item, therefore, is to consider an advisory resolution to approve the remuneration report. The remuneration decisions made by the Board during the year were just outlined by Nora but they're also detailed in the remuneration report. So I now formally propose the following advisory resolution, which is that the remuneration report for the year ended 30th of June 2026 as set out in the directors' report is adopted. The Board recommends that you vote in favor of this advisory resolution and I will now take any questions on this item. So firstly, are there any questions in the room? It would appear not Alex, any questions online? Sorry, there is. Yes.

Chair may have reintroduced Mr. Fraser.

I just wanted to ask, is this separate from the Resolution 4 -- actually for Vanessa?

No problem. If I can answer it, I will.

Should I mention that sort of Vanessa, particularly in context of Vanessa?

Sorry, what is the question?

I just wanted to -- thank you Chair for listening, stop me if you need to. I'm just interested in these bonuses, and I'm thinking particularly that I'm very grateful for Vanessa for her leadership for talent, for the way she listens to people, goes around to various workshops and workplaces, which is so essential for a CEO to do. The way she listens with understanding and the way she obviously has decisiveness. I'm not in the board meetings, of course, but I'm sure you're very decisive. Yes, and she's been committed to this company for more than a quarter of a century, and she leads what must be an amazing executive team. And indeed, that team includes not only the executives but all levels of the company, which is an iconic company. And I think the word came to me this morning that this company is precious to Australia. But I've got a wild idea that came to me in the last few days. I wondered -- wondering, is there a possibility that executives could consider voluntary reduction of their bonuses. Now I was wondering if that happened, would it strengthen the social cohesiveness, which is already in the company, which you can always strengthen these sorts of things. And would this actually affect the -- not only the airline but the nation itself knowing about these sorts of sacrifices, especially at a time when the country is facing such a huge cost of living pressure.

Just 1 last point is that I feel that staff belong to this company. And I think we, as shareholders, belong to this company. We're very proud of it. And our first nations people have had this idea it would be longing to the land. So I felt that maybe this crazy suggestion of mine might have some influence not only on the airline and the nation and beyond that of people feeling belonging. Thank you.

Thank you. Let me have a go at that. Firstly, thank you for your client comments about Vanessa. I saw her blushing slightly there. But we all agree. The Board is absolutely delighted with Vanessa's leadership, but also all of the team that she has assembled and works with. And I think we're all very lucky to have a team as capable as we have running the airline. I also agree with your comment about it being a national icon, actually met with some political representatives last night. And 1 of the things I said there was that the airline business is a very complicated business. In fact, many investors have told me that they think that Vanessa's job is the toughest in the ASX. So we're very conscious of that, all the ups and downs and pressures of the business, but we also have a huge obligation and responsibility around the reputation the airline and therefore, Australia because it is, as you say, seen the airline has seen as part of Australia, part of our international reputation, in particular and even people who haven't traveled on Qantas to Australia, we'll still have heard of Qantas. And that's where I think some of the things that we're doing and summarize next year is going to be -- we're going to be the only airline in the world doing it in the halo, I think that will create all Australians as well as Qantas is very substantial.

So to your specific point, look, we spend a lot of time benchmarking remuneration. And remember, our job is not just to control and govern. It's also to attract retain and motivate the very best talent that we can from around the world. We did a little analysis of airline CEOs pay around the world. and Vanessa is right down in the last quarter of some airlines not performing even remotely as well as Qantas is pay their CEOs a lot more. So we would actually like to pay him more, but we're very conscious of the relativity in Australia and all the things you mentioned cost to live. But I think we've got the balance about right. And remember, these bonuses are they call it bonus, but they're only paid on performance. They're not a bonus that you'd get for turning up to work. You've actually got to deliver value that benefits you as shareholders, then you participate in that through a burner. So I think we've got the settings about right. But thank you for your point. Anything else in the room? Looks like not. Alex, anything online?

Chair, the first question online is from Ms. Sales Ikarik. When will the Board stop issuing bonus shares to already well remunerated executives?

I hope I just answered that really. We set remuneration the level we think is appropriate to attract and retain the best talent. And if they do well, and shareholders do well, they should benefit and participate in that. Thank you.

Chair. The next question online is from Mrs. Nikitha. Chair, Nikitha has asked a series of questions on the governance review and links to the incident you raised an audio question about an incident with a check and kiosk. One of the questions was, following the governance review, the Board introduced stricter nonfinancial risk and reputation modifiers over executive bonuses. Currently, only major federal court penalties like the ACCC case trigger bonus reductions. Does the remuneration committee's risk scorecard also track and penalize executives the regulatory complaints escalated to the Human Rights Commission or the privacy commissioner when Qantas's digital systems breach passenger rights?

Well, I think it's not fair to say that the committee only exercises discretion around regulatory complaints and things. It's very broad reaching. So the Audit and Risk Committee during the year look at everything that's happened in the year, any risks created by management actions during the year, any problems, reputational or other. And then they feed that information into the remuneration committee when we're deciding on the remuneration outcomes for the year. So it can be any form of -- any aspect or any form of activity or outcome during the year that we think warrants scrutiny from a discretion point of view. And I think you heard from Nora earlier that there was a safety -- tragic safety event, someone loss of life in a contracted fresher. And management work being live for that even though they were not in any way directly responsible. So now we take that responsibility very seriously. And as I say, reiterating myself, we review all aspects of the company's performance and management's performance every year before agreeing final remuneration. I hope that answers the question. Anything else, Alex?

Chair, that concludes the questions online for this section.

Great. Thank you. So if there are no further questions, I will turn to the details of the votes received prior to the meeting. On the screen now are such details of the votes received in advance of the meeting in respect of this resolution. Qantas will disregard any votes cast on this resolution by or on behalf of key management personnel whose remuneration is detailed in the remuneration report and or their closely related parties, except if cast as a proxy and the votes are directed. As Chair of this meeting, I intend to vote all undirected proxies in favor of this advisory resolution. Over those voting today, please cast your vote now if you haven't already done so.

Thank you. The next item of formal business for the meeting is to consider the proposed award of rights to your CEO and Managing Director, Vanessa Hudson, under the group's long-term incentive plan. I'd like to reiterate an important point on the operation of the plan being that the rights awarded will only vest and convert to shares if the respective performance conditions are fully achieved.

For the long-term incentive plan rights to vest in full at the end of the 3-year period of performance, our total shareholder return needs to outperform 75% of the companies on the ASX 100 as well as 75% of the global airlines peer group. Should both performance conditions be achieved, the rights will vest and convert to Qantas shares on a one-for-one basis. These shares would then be subject to an additional 1-year holding lock. If the performance conditions are not achieved, the rights lapse and no shares are awarded. So I now formally propose the following ordinary resolution that Vanessa Hudson, the Chief Executive Officer and Managing Director of Qantas Airways Limited is permitted to participate in the long-term incentive plan as contemplated by the explanatory notes accompanying the 2026 Notice of Meeting. The Board, with Vanessa abstaining, recommends that you vote in favor of this ordinary resolution. I'll now take any questions on this item. We have one here, Number 4.

Chairman, please reintroduce Mr. Steiner.

Mr. Chairman, my question now is a question I ask a representative of the Australian Shareholders Association and not my personal matter. My question relates to the long-term incentive plan, and it is directed to you, but we have had 2 pre-meetings with Qantas Board representatives for which the ASA is very appreciative. And those meetings have discussed particularly the issues around this resolution. My question is focused on the policy criteria that is contained in the LTPI, and it should not be seen as criticism in any way of the performance of the Chief Executive. In our latest meeting nor Schein Kessel, as part of the pre-AGM engagement meetings, said that Qantas will consider return on capital investment for future remuneration networks. And in her address, she did foreshadow that her committee and through her the Board will consider reviewing and potentially adding to the current criteria, we take that as a positive step. But unfortunately, our conclusion is that we do not support the resolution and we don't -- our support is based on the criteria, not the personality. So we look forward to another discussion next year on the same topic. Thank you for your attention.

Thank you. Thank you. And I'm very aware and we've had other discussions on this. I'm very aware of the ASA's view, and we respect that. We've said -- deliberately said that we will return to give it a very good consideration to return to a financial metric. The main reason that we haven't as yet is One of the most obvious metrics is return on invested capital, which I think many companies and certainly elsewhere in my experience, form as a useful part of a long-term incentive. But Qantas' unique situation, given the very significant asset rights down at previous years means that the return on invested capital is actually declining as we increase the new fleet, in particular, the investments. And I think at 1 stage, it was close to 100% or something. I think now, Robert's 32 -- yes, yes, it's 32 now. Still very high for most industrial companies. And it just seems wrong to target management and bonus them on the decline. So when that levels out and we get to what we think is a sort of floor of return on invested capital, then it's a very useful metric. And at that point, we'll incentivize management to at least maintain it or improve it in the future. So we hear you, but there is actually logic. We're not just digging in for emotional reasons, there's logic behind it.

I appreciate the fact that this has been now publicly said at the AGM.

That's what we're here for. Thank you. Alex, any other questions online?

Chair. There are no further online questions for this resolution, beyond more from Nikita, which we have already covered in the meeting. Thank you, Chair.

Grand. Thank you. So no further questions. I will turn to the details of the votes received prior to the meeting.

On the screen now are details of the votes received in advance of the meeting in respect to the allocation of rights to the CEO and Managing Director, under the long-term incentive plan. As outlined in the notice of meeting, Qantas will disregard any votes on this resolution by or on behalf of Vanessa, her associates and her closely related parties, except of course, as directed by any proxies. Proxy votes cast by key management personnel and their closely related parties will also be disregarded where the votes are undirected. As Chair of this meeting, I intend to vote all undirected proxies in favor of this resolution. So for those voting today, please cast your vote now if you haven't already done so.

So all resolutions have now been dealt with, and that concludes the formal business of the meeting. And I now declare this meeting closed. Once all votes have been accounted for and verified by the share registry, the results of the AGM will be lodged with the ASX as soon as possible, which we expect will be later this afternoon.

On behalf of the Board, I thank you all for your ongoing support and for joining us today at the end of general meeting. I'd also like to thank Vanessa and all the management team and all our employees around Australia and elsewhere for the fantastic job they've done over this last year. Thanks also at all the organization, putting together the AGM and Tony and all the AV support and everything was fantastic. Tony has been doing it for 30 years, we discovered this morning. So he knows more about the company than I do.

So I would like then to conclude this year's AGM with a short video on Project Sunrise. And for those of you here in person, I hope that you will then join the Board and me for light refreshments out in the full year. Thank you all very much.

[Presentation]

Good morning, and welcome to the FY '26 Annual Results Investor and Analyst Call. My name is Filip Kidon, Group Head of Investor Relations at Qantas. I'd like to now hand over to Vanessa Hudson, our CEO, to take you through the results pack and introduce our group leadership team. Thanks, Vanessa.

Thank you, Fill, and good morning to everyone. Thanks for joining us here today on our Group full year '26 analyst briefing. I'm joined by Rob Marcolina, our Chief Financial Officer, who will help me in presenting our results here in Sydney, but we are also joined today by the group leadership team as well. Today's briefing is going to be in audio format only. And Rob and I will take you through several of the key slides from the materials that we lodged earlier today. And also Cam Wallace, who's the CEO of Qantas International, will take you through a separate update on Qantas International, and then we are looking forward to opening up to questions.

So we'll start on Slide 4, if you can turn to that. This has been another year of great progress across all of our metrics while responding to what has been a materially higher fuel cost environment in quarter 4. In the backdrop of the Middle East conflict, we came through it with a strong result, which is what allows us to continue to invest in our fleet and deliver more for our customers, people and for shareholders.

The key takeaway from FY '26 is that our strategy continues to work. We delivered our highest customer satisfaction in a decade, world-leading operational performance and demonstrated the strength of our integrated portfolio and dual brand strategy in changing market conditions. So in summary, underlying profit before tax for the full year was $2.064 billion, down $330 million on last year, but that includes $420 million of net impact from the Middle East in quarter 4. Underlying earnings per share were $0.96, down 13% on last year, and cash flow was strong at $3.9 billion. We are also delighted today to announce that the Board has approved a final dividend of $300 million. This is in addition to the $300 million interim base dividend that was announced in February.

But the $150 million on-market share buyback announced in the first half has been paused and will not proceed. And this does reflect our ongoing commitment to prioritize investment in the business while maintaining a sustainable base dividend. This year was defined by 2 very different operating environments. The first half and through to the end of February, Qantas and Jetstar were both performing strongly with demand growing across all customer segments on both domestic and international networks.

The final 4 months of the year saw the impact of the Middle East flow through to higher fuel prices for the industry and impacted local business and consumer confidence. Prior to the Middle East, the group was on track to deliver earnings growth for the year. And the 4 key factors that supported this and continues to support this. First was continued strong demand for travel across domestic and international markets, particularly from leisure and premium travelers. Second, the benefits of new fleet. New aircraft continue to improve our customer experience and our experience for our people and support stronger financial returns through lower operating costs and greater flexibility and network growth. Third, disciplined cost focus, driving transformation through both cost and revenue initiatives to offset CPI. And finally, and probably most importantly, the benefit of our integrated portfolio.

The diversity of the group allowed us to respond to evolving market conditions with our dual brand strategy and flexible fleet, allowing us to redeploy assets to match capacity with demand. And Qantas Loyalty continued to grow strongly and also did freight, which provided a valuable diversifier in the year. The renewal of the Qantas Group fleet is continuing. Jetstar has now almost 50% of narrow-body capacity in the new fleet. The renewal of the Qantas domestic fleet is also well underway. Qantas International has started its fleet transition, and our first Project Sunrise A350-1000 ULR will arrive in April and 4 new 787-900s are on the horizon.

Over this year, we invested $4 billion across the group and 29 aircraft joined the fleet. More than half of the new aircraft -- more than half were new aircraft, including 6 A321 XLRs for Qantas, 5 A220s for Qantas Link, 5 A321 LRs and 1 A320neo for Jetstar. This investment is a key driver of future earnings through improved fuel efficiency, lower maintenance cost, higher customer satisfaction and additional network opportunities. Jetstar's new fleet has now reached scale, and it is delivering benefits. This gives us the confidence in the benefits that will flow once the Qantas fleet renewal reaches scale.

As part of that renewal this morning, we announced that the A380 will start to retire from mid-2028. I want to recognize the importance that the A380 aircraft has played and continues to play for our people and our customers. And I will pass to Cam in a minute to speak more about this part of the Qantas International update. If we turn to Slide 6, starting with our people. None of this would have been possible without the dedication and the professionalism of all of our team members across the group. Our people have played a critical role in delivering continued improvement in operational performance and customer satisfaction and employee engagement increased again during the year.

We invested over $100 million in new training facilities this year, including A350, A220 and A320 flight simulators and a new state-of-the-art emergency training center in Sydney and Perth, where more than 10,000 Qantas and Jesttop pilots and cabin crew will be trained every year. Under our employee share program, eligible employees will receive another $1,000 in Qantas shares later this year. We always will remain focused on customers, and it is very pleasing to see that this has been reflected in our operational and reputation scores. Customer satisfaction reached its highest level in a decade.

Net Promoter Score lifted by 7 points for Qantas Domestic and also 5 points for Qantas International. Jetstar domestic NPS remained stable and Jetstar International NPS increased 6 points compared to the prior year. Operational performance continued to improve, including Qantas, achieving 85% on-time departures in June, making it the best-performing major global airline for that month. Our customers have more to look forward to over the next 12 months with up to 31 new aircraft deliveries, including our first Project Sunrise aircraft. significant cabin refresh programs on our Qantas A330s and Jetstar 787s, opening of the Qantas Sydney International Business Class Lounge and rollout of WiFi across the international fleet and progressive rollout and expanded Qantas frequent fly benefits, including Jetstar upgrades, status credit rollover and enhanced reward seat access.

Finally, on sustainability, we remain focused on our long-term targets and have made further progress this year. In FY '26, our SAF procurement increased to 1.1% of total fuel. And we have also committed $30 million towards carbon removal projects, working with our partners to target native species planting. Today, we are also releasing our next sustainability report, which, for the first time, encompasses climate reporting, providing more detail on climate impact analysis and transition plan.

I'd like to pause on Slide 7 to briefly reflect on the ongoing conflict in the Middle East. The group continues to actively manage the impact of higher fuel prices. In response, we took decisive actions, both adjusting fares and capacity. We also redeployed aircraft across our network to support customers and captured demand to Europe as Middle Eastern hubs effectively closed. These actions, along with other mitigations, limited the net impact on earnings to $420 million for the period. Heading into FY '27, we have also increased our liquidity to secure much of our funding task for the coming year. Shocks like this are not new to aviation, and it's why we prioritize our balance sheet strength. The group will continue to monitor developments and to adapt to conditions as needed.

Turning to Slide 17. The strength of today's result reflects the deeply integrated value across the group. I'll now provide an overview of business performance, and the CEOs of each segment will also give their perspective during the Q&A. Group Domestic delivered a strong EBIT result of $1.44 billion with an EBIT margin of 13%. Overall, domestic brand demand remained resilient with strong leisure travel across both Qantas and Jetstar as customers continue to prioritize travel spending.

Resource sector travel was supported by ongoing investment in Western Australia despite some impact to demand from mine closures in Queensland. SME performance remains solid, underpinned by the need for face-to-face engagement. Larger corporates and government customers heightened their focus on cost management amid ongoing economic uncertainty. Qantas Domestic delivered a strong result prior to the Middle East conflict with the last quarter impacted by higher fuel price and impact on corporate demand. As fuel prices rose during the final 4 months of the year, Qantas Domestic acted quickly through a combination of pricing, capacity and network adjustments, helping to drive a 5% increase in unit revenue.

Jetstar Domestic delivered another outstanding performance with revenue growing by 11% on 4% capacity. Demand remained particularly resilient in the fourth quarter as value-conscious customers continue to seek affordable travel options closer to home. Group International delivered capacity growth across the year. Pre-conflict, international demand was strong and broad-based, supported by new Jetstar fleet deliveries, the return of the final A380 and ongoing premium cabin demand. As conflict began, both Qantas and Jetstar responded quickly to the circumstances. Qantas optimized the network, redeployed capacity from domestic to international to capture displaced demand to Europe while managing capacity in response to high fuel prices. Combined seat factors on Qantas London, Paris and Rome connections grew to over 90% during the period. This enabled Qantas International to deliver a $371 million EBIT with revenue growing by 8% on 7% capacity for the year.

Similar to Qantas, Jetstar made fare and capacity adjustments to optimize earnings and also attract displaced demand as other airlines reduced capacity to leisure markets. As a result, Jetstar Australia International business performed strongly for the year with an EBIT of $279 million and an operating margin of 11%. Both Qantas and Jetstar continue to see strong demand internationally. Now to Qantas Loyalty.

Loyalty continues to demonstrate the value of resilience of the group's integrated portfolio. It delivered 12% EBIT growth to $625 million while continuing to expand engagement across retail, financial services and SMEs with 1 in 4 Australian SMEs within the Qantas Business Rewards membership base. The program delivered record rewards seat booking, increased member engagement and continued growth in both points earned and points redeemed, both increasing at 9%. Now I'll hand to Rob.

Thanks, Vanessa. So we'll now turn to Slide 10 for a more detailed look at our financial metrics. Underlying profit before tax for the full year was $2.064 billion, down $330 million versus FY '25, and this included the net $420 million impact from the Middle East conflict.

Statutory profit after tax was $1.289 billion, down $360 million versus FY '25. Statutory profit included the impact of Jetstar Asia closure costs and legal provisions and related costs relating to Qantas' class action settlement. Underlying earnings per share was $0.96, and the group's operating margin was 9.2%.

For the full year, operating cash flow was strong at $3.9 billion. Net debt ended the year at $6.2 billion at the middle of our FY '26 target net debt range of $5.5 billion to $6.9 billion, in line with our guidance provided in April. Net capital expenditure was $4 billion, again, in line with guidance provided in April. There were $700 million of dividends returned to shareholders. Our total unit revenue or TRASK increased by 3.6% and total unit cost ex fuel or TCAS increased by 4.1%. This was driven by several factors, which I'll explain as part of the group profit bridge.

So moving to Slide 11, the group profit bridge. On this slide, I'll walk through the key drivers in our underlying profit from FY '25 to FY '26. For the full year, group capacity increased 3.4% with new fleet deliveries and the return of the final A380 contributing $143 million in earnings. The increase in fuel costs in FY '26 was $492 million, which included $26 million of additional gross carbon costs and was predominantly as a result of the Middle East conflict. Group RAS grew by 5% with group domestic at 4% and Group International at 5%.

In the second half, RAS grew by 5% and 7%, respectively, at or better than guidance we provided in April 2026. Our transformation program for FY '26 was above prior guidance, delivering $455 million for the full year, more than offsetting CPI with a mixture of cost and revenue initiatives. For FY '26, depreciation and amortization increased $236 million, reflecting the acceleration of our investment in fleet. The ramp-up in fleet renewals saw the business incur fleet-related EIS entry into service costs, while a net increase in industry costs was $95 million.

Turning to Slide 26. Our long-standing financial framework is core to our strategy. It's designed to structurally maintain financial strength, including low leverage, strong liquidity and an investment-grade credit rating. It also guides capital allocation, including opportunities for capital recycling to maximize group value through the cycle.

As Vanessa mentioned earlier, our balance sheet strength has allowed us to navigate the current conditions, maintaining investment in fleet and base dividends for shareholders. Capital expenditure, as I mentioned, for FY '26 was $4 billion, in line with guidance provided in April. We are also today providing an update guidance for FY '27 for CapEx, which is now expected to be $4.3 billion to $4.6 billion.

On shareholder distributions, we are committed to a base dividend that is sustainable through the cycle. And again, as Vanessa mentioned, we are delighted to share that the Board has approved a final FY '26 shareholder distribution, a fully franked base dividend of $300 million or $0.198 per share. This takes the total FY '26 base dividend to $600 million, $0.396 per share fully franked. As evidenced by the decision to divest our stake in Jetstar Japan, we remain focused on ensuring optimal capital allocation across the group. I'll now hand back to Vanessa.

Thanks, Rob. We are on Slide 29, the outlook for the first half of FY '27. Travel intentions remain resilient and customers continue to prioritize travel spending. Ongoing conflict in the Middle East continues to influence the economic environment through higher jet fuel prices and industry capacity settings. Internationally, demand for both brands remain strong.

Domestically, we see trends stabilizing and consistent with what we saw in quarter 4 of 2026. Ongoing forward, we will be moving to TRAS. So this is total revenue over ASK guidance for our airline segment, which includes ancillary revenue streams, and we hope will simplify guidance for the market. We expect group total unit revenue or TRAS to increase for both the group domestic and group international businesses, also equally in the range of 8% to 10% over the same period. TRAS guidance is inclusive of the impact of capacity from tables provided on Slide 30.

And given the ongoing impact of the Middle East, TRAF guidance is aligned with the outlook provided on fuel. Fuel cost for the first half '27 is approximately $3.6 billion, referencing a market jet fuel price of AUD 197 a barrel. The group remains highly hedged in Brent at 85% for the first half and maintain significant levels of participation should fuel price revert lower.

For the Qantas Loyalty underlying EBIT is expected to grow between 5% to 7% for the full year of '27 and will remain on track to our target of $800 million to $1 billion for FY '30 in underlying EBIT. Our outlook slides provide further detail on specific line items, including fuel, depreciation and transformation on Slide 29. We also have our latest capacity guidance on Slide 30 for investor materials. I'll now pass to Cam to provide a short update on Qantas International and its fleet strategy.

Thank you, Vanessa. Thanks, Rob, and good morning, everyone. Today, I want to take you through an update on Qantas International, why we think this is an inflection point for the business and for our future financial performance. Qantas International is going through an important fleet transformation. We started this in 2017 with our first 787, launching ultra-long-haul routes like Perth to London, Perth to Rome and Perth to Paris as well as Auckland to New York. The 787s deliver the highest customer satisfaction and the highest margin on our international network.

What you'll hear today is the next phase of the fleet strategy and our pathway for Qantas International to reach 10% EBIT margin by financial year '31. I'll take you through a small number of the select slides in the Qantas International investor presentation. So if we move to Slide 5, and let's talk about the fleet. Our future fleet is critical to delivering a sustainable uplift in both quantity and importantly, quality of earnings. And this is driven by 3 key factors.

Firstly, flexibility. The new fleet means more network options, diversifying our revenue and covering more routes direct, the way our customers want to fly. Two, premiumization. Part of the fleet and network strategy is making sure we're driving growth in the cabins in which our customers want to travel. That means the new fleet has higher premium cabin density, growing the cabin mix of premium from 19% of our flying today to just under 30% by the financial year '31. And three, cost and operational efficiency. This is what we get from new generation technology, simplification of our fleet and the opportunities for future transformation, which is enabled by the fleet.

Increasingly, our narrow-body fleet of 220s and XLRs will play a role flying into the Tasman, the Pacific and Asia and ensuring that capacity is matched to demand whilst also optimizing frequencies. The 220 already flies between Brisbane and Wellington. -- and the XLR will fly early 2027 from Brisbane to Manila. The new wide-body fleet includes Project Sunrise A350 aircraft and the 350 standard variant, which will fly to some of our longest sectors in Europe and the U.S.A. The 787-10s will join the 787 fleet and fly slightly closer to home.

By financial year '31, 70% of our capacity will be on next-generation aircraft. All of these aircraft will deliver a step-up in customer experience compared to what you see and what you experience today. We'll also bring LeLat to Qantas single-aisle aircraft for the first time with a new business suite for our XLL fleet. The new wide-body aircraft will start arriving first with Project Sunrise from April 2027 and the next 787 in financial year '28. We will also start to see the progressive retirement of our 737s and A330s.

And as Vanessa mentioned, today, we announced our A380s will start to exit from the mid-2028. So talking about the A380, let's turn to Slide 8. The Airbus A380 is our flagship. It's much loved by customers and our people, and it's played a critical role in our fleet ever since the first delivery way back in 2008. Over the last 6 months, it's allowed us to optimize the network and fleet to capture demand arising from the Middle East conflict.

Now I know some of you may ask, given how loved this aircraft is, why retire it and why retire it now? Well, there are 3 key reasons why. One, we are constantly looking for ways to optimize how and where we deploy our capital. The A380 retirement unlocks approximately $300 million of net cash flow benefit from FY '28 to '31, primarily through lower capitalized maintenance costs. This capital can be more efficiently deployed to new aircraft and deliver sustainable earnings uplift. That's a big deal for how we sequence this transition. Two, it's an aircraft which has been out of production since 2021. We already have supply chain challenges today, and we know there's likely to be supply constraints into the future. This creates operational complexity and thus higher operating and maintenance costs. And three, with the first Sunrise aircraft now on the horizon, this gives us greater confidence in the delivery schedule of our future fleet.

As the A380 transitions to newer tech like the A350s, this will deliver value to Qantas International. And there's 2 stats that bring this to life. The A350 standard variant has a higher premium density at more than 40% compared to 30% on the A380. And on city pairs like Sydney to Dallas, switching to an A350 delivered an estimated 12% increase in contribution margin.

Moving to Slide 9. We've talked a lot about the A380s, but it's the A330s that actually make up more than half of our wide-body fleet. The Qantas A330s only have premium density of around 10%. It doesn't have a premium economy cabin, which we know our customers want, and the economy cabin is bigger than it needs to be on some of our thinner international routes.

The 330 flies a mix of international routes, and now we've got the chance to move on to 2 new aircraft types that will better match demand and optimize costs. An example is Brisbane to L.A., which is a long-haul city pair. Switching from a 330 to a 787 lifted contribution margin on that market by 20 percentage points. Higher premium density is a big part of that, especially on longer routes where we know the demand is there. We also know customers prefer the 787. OTP lifted and NPS doubled on that city pair.

Now it's a different strategy on shorter city pairs like Perth to Singapore. Here, the challenge with the 330 is the high seat count. Put simply, we're flying more seats that we can fill at the right price. This route can soon be served with a narrow-body like XLR, which best matches capacity to demand whilst also retaining frequency.

We expect to see a 10% increase in contribution margin. Higher unit revenue plays a part, but also key to switching to a narrow-body with this next-generation technology. This turns up in lower fuel unit costs and lower unit depreciation relative to the 330.

If I move to Slide 10, a slide I suspect you will be keen to see. This slide outlines our indicative earnings trajectory from financial year '27 to '31. Quantas International EBIT margin is expected to go from 4% in financial year '26 to 10% by financial year '31.

The earnings and margin trajectory is directly tied to the new fleet delivery, which unlocks premium cabin seat growth and delivers technology efficiencies. By financial year '31, Sunrise is expected to deliver the $400 million in earnings uplift that we've mentioned in previous results. Beyond financial year '31, we expect Qantas International earnings to grow and margins to reach between 10% to 12% as the fleet renewal continues. We know entry into service cost is necessary to unlock these benefits. That's expected and captured in the earnings trajectory shown here.

In financial year '28, '29, the EIS cost is approximately $150 million, but that will decline over time as the fleet reaches scale. And while this slide is focused on the medium to long term, it is important to acknowledge that in the short term, Qantas International will be impacted by elevated fuel price, as mentioned in the outlook earlier.

On to Slide 11, integrated value. Group integrated value is the glue that underpins the success of the Qantas Group. The investment in Qantas International generates value across the group in 3 key ways: one, international feeds domestic. Our international network proposition underpins the value we offer our domestic customers across the group. With Project Sunrise and the increasing direct markets, we believe we will further strengthen that proposition. Two, international and loyalty reinforce each other. Members want to redeem points on Qantas International and particularly on premium seats. We actively invest in the loyalty program by ensuring reward seats are available to our customers. And that's the flywheel. It drives the attractiveness of Qantas Frequent Flyer and Qantas Business Reward program, which in turn attracts quality coalition partners and drives value for loyalty.

And finally, freight. The investment in our future fleet means more freight capacity and unlocks earnings growth. Put it all together, and while Qantas International segment was 15% of the group's FY '26 underlying EBIT, it actually enabled 30% of that result. It's also enabling around 40% of the group revenue received in advance, which is critical to our working capital.

So to bring it all together, if we could move to Slide 12. Qantas International is undergoing its most important fleet renewal. The sustainable earnings uplift is based on 3 key things: flexibility, premiumization, efficiency. That's the thesis, and we're already seeing it playing out with our 787s. Project Sunrise is almost here and will deliver a $400 million uplift in earnings and working capital by FY '31 when that fleet reaches scale. This means Qantas International has a clear pathway to the 10% margin target by FY '31 and to 10% to 12% beyond that.

And that's before including the broader value delivered back to the group. I'd like to close by thanking our people around the globe for everything they do, taking Australians to where they want to travel and bringing them home safely again. And thank you to all of our customers for their continued loyalty and support.

I'm now going to hand back to Vanessa, who will head into the Q&A.

Thanks, Cam. We closed FY '26 and we have entered FY '27 from a position of strength. Customer satisfaction is at its highest level in a decade, and our domestic fleet renewal is well in progress. The first Sunrise aircraft arrived in April next year and broader international fleet renewal will begin soon. Our integrated portfolio provides resilience to respond to market conditions as they evolve. As a management team, we remain focused on delivering to our customers, our people and our shareholders. And I'd like to close by saying thank you also to all of our staff for making the results possible that we delivered here today. We now will open up to Q&A. And moderator, I will pass over to you.

Your first question comes from Anthony Moulder with Jefferies.

A lot of detail on the medium-term transformation for the group in this presentation, I appreciate. But can I just go back to domestic and specifically around that TRAS guidance for domestic 5% growth that we saw in fourth quarter '26, but that is now expected to step up to that 8% to 10% growth in first half '27. So I guess I wanted to understand as to whether or not you're expecting the fare increases that you've already pushed through will give you that growth across Qantas and Jetstar -- or are you needing further increases to cover that higher growth through first half '27, please?

Yes, great question. And I will pass to Steph and Markus in a minute to just kind of give you a flavor of what we're seeing, but also what our intakes are showing us. But as you would appreciate in quarter 4, when the higher fuel price impacted, we've actually sold quite a large amount of our revenue. And so therefore, sold those on tickets that obviously were inclusive of fare increases.

But across the business, we have taken active fare increases in terms of capacity, but also the fare increases across Jetstar and Qantas was not just in quarter 4, but actually many across the financial year. I think as we look forward, TRASK, we think, is a really important metric to move to because TRASK builds into not just fare increases and also obviously, average fares, but it includes increase in seat factor, it includes ancillary revenue, which we're driving very hard, but it also includes charter revenue, which is increasingly becoming a greater proportion of our revenue.

So we think TRASK as a metric going forward is going to be much more meaningful to investors. And just on the point of what we are going to continue to do, we're going to continue to drive and do what we need to do to respond to the market. And so we are not saying that everything that can be done has been done because we're going to continue to drive where we see demand, we're going to continue to push to maximize revenue and clearly, obviously maximize earnings. But the outlook that we've given you is the best indication that we see at the moment. And I might pass to Steph because J start seeing incredibly strong demand.

Yes. Thanks, Vanessa, and thanks, Anthony, for the question. I think we have a lot of confidence in the outlook from a leisure demand perspective. And I think there's a few proof points. Firstly, still in our research, we see that travel intention high and the prioritization of travel high. I think there genuinely has been a structural change in the desire for travel and experience in the last few years, and we're seeing that hold and in some ways, strengthen. We're now late August. And so we've had 2 months of intakes, and we're seeing for the financial year, we're seeing very strong intakes.

Jetstar had a record week last week, in fact, but very strong intakes across both domestic and international. And what you see in this first half, in particular, is a really strong events calendar. AFL finals configured the way that we like and very strong concerts, et cetera, this half. And I will say on just a managing yield perspective, we like to look at the way we manage prices always on. We've got sophisticated tools in our revenue management team, which means you don't just see blanket increases, you see multiple increases across different routes every week, and we will continue to manage that in a dynamic way to make sure we're getting the yield we need to look to mitigate the fuel.

And as Vanessa said, I think from a TRASK perspective, for Jetstar, that's particularly important as we look to keep innovating on ancillary revenue, our new priority carry-on bag is an example of that, which really changes the mix. So -- and seat factor is always a factor in TRASK as well, and we will keep driving high seat factors on Jetstar whilst maintaining the flexibility with capacity. So I think we've got very confident view of that outlook from a leisure demand perspective, which continues to be resilient and strong, I would say.

Yes, Markus?

Yes. I can just echo what Vanessa and Steph said in terms of the outlook and the confidence we have in the outlook for the first half. As Steph mentioned, we're almost 2 months in and what we're seeing is very much what Steph mentioned in terms of the strength of leisure demand, SME demand and how the events calendar fall into place for us in the first half. So yes, we have a high level of confidence in the numbers.

Next question is from Owen Birrell with RBC.

Just 2 questions from me. Just the first one around the CapEx guidance. I noticed a step down from what you were guiding in February. I'm just wondering whether that's a deferral or delay of deliveries or just a shifting of payment terms? Or is it associated with the A380 retirement? I just wanted to get the bottom of the CapEx reduction.

And then in terms of a second question, just referring to the loyalty business. Just wondering if you're starting to see -- or we're starting to see banks having to reconfigure the loyalty linked credit cards. Just wondering if you can give us some sense of what you think about the impact into '27, any measures you had to mitigate that?

I might take the first question just on the CapEx. So the $4.3 billion to $4.6 billion is essentially there's 4 reasons. So if you go back to February when we had the previous guidance, we were calling 4 Sunrise aircraft in FY '27, we've now got 3. So that's the first reason. We've also seen improvement in the foreign exchange. The Australian dollars got better, which is obviously good for CapEx. With less flying, we've got less capitalized maintenance that we're scheduling in FY '27.

And then also just going back to the point around recycling of capital, we've called out the Jetstar Japan and expectations at the end of June that those proceeds would also help with regards to the capital recycling. So they're probably the 4 main reasons with regards to CapEx guidance.

And I might just make a couple of comments on loyalty, then I'll pass to Andrew. The financial services approach to defining the customer value proposition on credit cards has been a focus for them given the change in the interchange rate. We're really pleased that all of our banking partners, we've reached in-principle agreement across all of our banking partners who remain important to the Qantas Group for all of them. I think as you note, there are differences in the decisions that those banks have made, and that's okay in that regard. But I think that the one thing that I would say is that we continue to see incredibly strong demand with our customers for points and also points on credit cards. And we are starting to see customers who are savvy and who are focused on understanding how that market is changing. We are seeing our customers change and move across different kind of card products. And so this will remain an incredibly important part of the loyalty program, but so are the other parts of our program because the team has been diversifying that over time.

Yes. Thanks very much, Vanessa, and thanks for the question, Owen. I think Vanessa has probably covered most of the points there, but I do think it's important to sort of acknowledge upfront. This was something that we were very much prepared for. And we've been building these relationships over the last 30 years with our financial services partners. And going into these conversations, the conversations were essentially led through 3 overarching objectives. Number one, it was to ensure that we maintain that direct earn construct of which members can earn points today. Number two, and really important was to ensure that we preserve all of our financial services partnerships. And number three, it was about balance and importantly, balance for our members. I'm extremely pleased to say that we've achieved all 3 of those.

The direct earn construct remains all partnerships are preserved. But equally important or most important, I should say, is there's been a balanced outcome for our members overall. So clearly, each issuer has decided its own response through fees, rates, rewards and a combination of these. From a timing perspective, yes, we will see the greatest impact in the second half of '27, and that's why we've guided between the 5% to 7%. But most importantly, we remain committed to the 10% through to '28 and importantly, the $800 million to $1 billion.

Your next question is from Andre Fromyhr with UBS.

I just wanted to follow up on Cam's presentation on international, including the retirements of the A330s and A380s. So I guess you called out the capital benefits of no longer investing in the capitalized maintenance on those fleets. Curious if there is any potential proceeds from retiring those. But then more broadly, what does that time line of retirements mean for how international capacity growth will look over that medium term?

And by extension, how would you build the confidence with investors that the Sunrise EBIT estimate of $400 million is truly incremental rather than replacing income from the existing services on those aircraft?

Well, a couple of things, and then I'll pass to Cam. I think first and foremost, we have been absolutely focused on making sure through the lens that we always apply, which is the financial framework is that we are putting in place plans that not just kind of generate quality of earnings and improvement in earnings, but actually do that by minimizing the capital that we've got deployed across the business. And that is absolutely what you can take in terms of the objective and the intention that sits behind the plan that we put today.

We haven't yet defined the endpoint of the final retirement of the A380s because we also, as we said over time, want to maintain flexibility to operate through the next 5 years and making sure that we're responding appropriately to the competitive supply and also demand environment. And I think that, that remains really important, and that's something that we've committed to investors in the past, and we'll do that.

We've obviously outlined Project Sunrise. And if I come back to the A380 was always going to be retiring in our plan. We've just now brought forward the perspective and some confirmation of the commencement of the retirement date. But we remain really confident that the $400 million in uplift in Sunrise is contributing to this improvement in earnings performance over the next 5 years. But also, you can see in that presentation that, that will continue to run through earnings growth beyond that as the run rate and as the new fleet come in over time. But Cam...

Yes. I mean I think you've covered a lot of that. But in terms of the A380, I'll just expand on that a little bit. In terms of the capitalized maintenance savings, that's for things like engine overhauls, landing gear and heavy block checks that we can actively avoid.

Now the key part of making the determination today around the start of the retirement was to give clarity to customers, but also importantly, our people, certainly our pilots in terms of what aircraft they want to be trained on and whether we can generate some opportunities and some savings through that process, which we are confident we can. But at the back end of the program, we are giving ourselves some flexibility. So we'll be managing it actively and looking at the market conditions, looking at the growth and looking at the competitive activity. So we'll still maintain our ASKs capacity.

But importantly, through that transition, we'll be having a material step-up in the number of premium seats not just business class, but premium economy and on the new aircraft will have Yus as well. So what we're getting right as we retire the A380 is the right platform for us. We were based geographically in the markets we serve, which is more and more going to be nonstop direct point-to-point markets, but also the right premium density and importantly, for us in an environment like the right cost vehicle. So yes, we have got flexibility at the back end of the program, but we thought it was important to announce today.

Your next question comes from Matt Ryan with Barrenjoey.

I had a question about the fuel recapture and your guidance. So I guess at a high level, in fact, I think you've actually talked about TRASK sort of being aligned to the fuel outlook and you don't have any capacity growth per your guidance either. So just interested in your ability to push RASK any further. So I think 9% is clearly a huge number.

And if you can get there, that's very high on historical standards. But are you sort of pitching that number to recapture the fuel because that's about the limit that you think you can get to because the consumer environment or what have you? Or is there an ability to go any higher to actually provide growth ahead of the deal?

So Matt, I might take that. Just in terms of the recapture, obviously, Vanessa talked earlier around the time period in the fourth quarter that we'd already presold a number of the tickets. And so with greater time, it gives an opportunity to get more of that increased price and so therefore, be able to capture more of the price increase. So as you saw in the fourth quarter, it was around 30%. So we would expect to be able to capture more of that. I think your point on the TRAF, again, going back to the components of TRAS. So it obviously includes price.

But as Stephan and Markus have also said, it also includes load factors, which we're going to be pushing hard on and also ancillary. So whether it's through the baggage product, whether it's through Economy Plus that we've now got in a greater part of the Qantas Domestic network. So there are a lot of ways that we can help to recapture the price. Your point on elasticity is well founded, though. We are very focused on that, very aware of it. I think what Steph said earlier in terms of the intakes indicate that there's very strong and continued demand from a leisure and a number of the other segments. And so we are very conscious of the elasticity, and we continue to monitor that on a weekly basis.

Your next question comes from Jakob Cakarnis with Jarden Australia.

Rob, if I could just pitch one to you, please, Slide 26 and 27. I mean the message seemingly is that there's a CapEx reduction in '27. The buybacks probably prudently be put to the side. And you're telling us that gearing is going to be top end of the target range. I guess wrapping that all together with Cam's presentation, how do we think about the suitability of the capital framework moving forward? I mean it's been a couple of years since you've been at that 10% ROIC level that that's set on. Can you just help us, firstly, are we seeing prudence today given the outlook? Presumably, there's some flex in non-fleet CapEx. And then yes, just the viability of that capital framework as we move to fleet changes for international, please?

Yes. Thanks for the question, Jake. And I would say the financial framework is a bedrock of the way that we run the business. As you've indicated, the financial framework is conservative in nature because it assumes a 10% ROIC. And so our confidence level in moving to the upper end of the net debt range, which we flagged in this presentation, why are we doing it? Well, we're doing it because we're investing in aircraft, and we continue to see the benefit from doing that and up to 31 aircraft.

But why are we confident moving to the upper end of the net debt range is because it is a conservative range. It is based on the 10%. But I think also the liquidity that we've got in the business, over $13 billion now gives us continued confidence in the setting of the business. And also, we're a long way from the threshold with an investment-grade rating.

The other thing I'd say, though, is that we also made reference to the net debt range that in FY '28, we're not giving any specifics, but it's our intention to come back towards the middle in FY '28. So we're very confident that what Cam laid out and the fleet investments that we've also given you for FY '28, which obviously will require an increase in CapEx, we feel quite comfortable with that given the conservative nature of how the financial framework is set up.

Your next question comes from Lee Power with JPMorgan.

Just on costs ex fuel, is it possible to give us an idea of how you see them tracking? I obviously transformation benefits, but it'd just be interesting to see how the different buckets are looking? And then any comment, I think in the annual wage review, there was some call out of flight attendant wages. So anything that's changed around that would be useful.

Yes. Look, I think that a broad comment on costs ex fuel is that we have seen and we have provided in the investor presentation a bridge that kind of helps you step through on a gross basis of what are the drivers of cost. And that is inclusive of wage growth. We have seen many industry costs grow ahead of CPI, including airports and particularly also security and also government charges as well. And so that table that we've provided shows approximately a 4% growth in underlying costs, excluding fuel.

But as we've said in the past, our focus is on making sure that we continue to drive transformation across the group, both revenue and also cost to offset the impact of CPI on our business. And that is inclusive of wage escalation as we move through new EBAs and as we close EBAs as well. And that's going to be our commitment going forward. Increasingly, that transformation is going to be unlocked through automation, digitization, use of AI.

And we look forward to talking to you more about what those use cases are over time because we are seeing incredible value being unlocked across the business, not just in terms of productivity and driving efficiency, but unlocking better customer outcomes and also better outcomes that drive improved operational performance. So we see that this is an incredibly important part of our forward view. And it's a commitment that, as you can see in our outlook statement that we maintain. Next question...

Your next question comes from Cameron McDonald with E&P.

Can I get some breakdown of what you're seeing in international, in particular and even into the fourth quarter of last year around -- you made some sort of very quick comments around Europe, but the split between the European contribution, the capacity that went into that market to offset the Middle Eastern carriers, the fare increases and then correspond that to what you're seeing in the U.S., noting that Flight Centre in particular, yesterday actually called out that the U.S. was "booming." -- so interested in seeing what you're seeing in that space.

Yes. I'll make a few comments, and I'll pass to Cam. We have seen in the fourth quarter really significant growth in demand to Europe. And we saw our RASK respond accordingly and also driven by a much improved seat factor. And so the capacity -- we maximized the capacity or the additional capacity that we could get into Europe, and that's been both in terms of redeploying aircraft across our network, but also driving utilization. And so we believe we've positioned Qantas International as best we can for that. But Cam will give you a bit of an overview across all of the different markets because we've seen strong performance across other markets than just Europe as well.

Yes. I mean if I look to how we have leveraged the network, and it's not just the international network, it's actually the power of the group taking some equipment from domestic and redeploying it in international and then moving our 78 fleet into parts of the network where we could extract value and minimize some of the cost impact. That's been really successful for the U.K., for Paris, for Rome. But also in the short term, the U.S.A., we actually developed some connecting traffic after the war started through the U.S.A. where there really was demand looking for ways and means to get to their final destination.

And then importantly for us, actually Africa, which we serve with A330 from Perth and A380 from Sydney is emerging as another connecting way to get to the U.K. and Europe. In terms of the U.S.A., that's a market that we deployed the A380 on. So that was a 14% step-up in ASKs. And that has rebounded. So we're about flat on our RASK at the moment. So we're seeing strong both outbound demand from Australia to the U.S.A. as well as a strong response for in the U.S.A. for getting people to Australia. So I would agree with the analysis from SplightCentre that, that is a market that has rebounded, and we have the capacity available to absorb that demand. So we're very happy with the way has gone in the last 6 months.

Your next question comes from Samuel Seow with Citi.

Just a question on domestic RASK. I guess we can see the divergence in seat factors across the brands. expect -- so as we think about first half '27, are we expecting that domestic RASK to be even across the 2 or more weighted to one versus the other? And if refining margins do come down, should we be expecting RASK to follow? Or how we should think about any margin or catch-up you might be targeting?

Well, obviously, we haven't given a breakdown of the RAS. We've given you a TRASK for the domestic flying segment. And just to reiterate that Marcus and Cam, in terms of what we're seeing in the intakes across the 2 business gives us the confidence that, that outlook statement is on track.

And I think that, that's really important. In terms of just the broader question that you asked around normalization of fuel, I believe that some of our RASK performance will become structural.

And it kind of -- it needs to in some regard because -- we're seeing a certain amount of escalation in costs in other categories, industry costs, airport costs, government cost. And that is a cost that's borne by all operators. And so we would not expect that RASK would normalize in line with fuel. And that would be the same for the international businesses as well. Markus, do you have anything else to add to that?

No.

Your next question comes from Justin Barratt with CLSA.

I think my question today is for Steph. I guess from what I can see, again, a really strong revenue performance from Jetstar, but the really positive EBIT result, I think, comes equally from the benefits to your cost base. So I was just wondering, Steph, if you could talk to the relative advantages that you believe that you have in your cost base, what the key drivers are of that? I mean I appreciate a lot of it may come from the fleet renewal program, but if there's anything else there that we should be aware of, I guess?

Yes. Thanks, Justin, for the question. I think there's a few things that are worth probably pointing out. First and foremost, the biggest contributor is the fleet, and that's not just the efficiency of the fleet, but also the growth it's enabled for Jetstar. I think secondly, just to Vanessa's earlier narrative on transformation, absolutely for Jetstar, we're always going to be laser-focused on transformation, both cost and revenue, and we're seeing some really great outcomes there across the different parts of the business.

And I think the other thing for Jetstar that's really important is just operational stability because a good operation is the lowest cost operation, and we're really focused on cancellations and seeing good results there. The other thing I would say for Jetstar, it's worth noting we've made tough decisions. We sold an airline and we closed an airline in this reporting result, and they will have positive outcomes given their financial performance for Jetstar's result going forward. So I think there's lots of momentum to continue that trajectory.

The next question comes from Ian Myles with Macquarie Research.

Just following up on that, you've got the fleet renewals or new planes coming in. It's curious to see Jetstar is the outperformer yet it doesn't actually have any more planes arriving post the fall this year. Just sort of what your thought process on that? And the follow-up to that is, what's the latent sort of capacity in the fleet given higher fuel prices you're optimizing. If things go back, how much can you sort of surge the fleet without actually needing more planes?

So just the question on the mix of allocation of capital to the Jetstar refleet versus Qantas Domestic. I mean, clearly, the decisions that we have made to prioritize the capital into commencing and accelerating the Jetstar fleet to almost 50% new fleet has been a fundamental part of our strategy to make sure that Jetstar is fighting fit, but also enabling Jetstar to grow and expand into new markets. And the one thing that I think is important to recognize is that Jetstar were not changing the fleet type. It was remaining with just the next fleet variant of the A320 and the A321.

And so Jetstar has been able to demonstrate without the entry into service costs, the fast ramp-up and improvement of earnings that have come from that. And that's both in terms of driving transformation fuel efficiency, but most important, utilization and opening new markets. Again, not just driving improvement in profit, but actually bringing lower fares and affordable fares to customers. And we're going to continue to be focused on that. But we also have to make sure that we get the balance right across the renewal of the group.

And so commencing the narrow-body replacement for the Qantas fleet is important. And so a large amount of allocated capital in the next 12 months will be to get the Qantas XLR and 220 to scale. That's really, really important for Qantas Domestic because as Qantas is moving from a 737 fleet to the Airbus fleet, we need to do that as quickly as possible. And this is always through the lens of the financial framework. And that is, again, the commitment that we have to the market is that we get that balance right.

We focus on making sure that the fleet renewal is balanced across the different brands. but also driving towards that earnings uplift and that scale really quickly. Now I've forgotten the part of the question.

No, I'll answer the second part of the question. So I think your words, Ian, were sort of surge in ASKs. I think what I wanted to just point out here again is just to reiterate the benefits of owning our own fleet. So owning 85% of our fleet allows us, and Ken mentioned it earlier, but allows us the flexibility to not be beholden to lease rates and lease returns. And so whilst we do have a retirement plan and with the aircraft, I think the flexibility we have to stare into that retirement plan is an advantage that we have versus many other airlines.

Your next question comes from Joseph Michael with Morgan Stanley.

I just had a question on Project Fish and more specifically the returns. So I guess the A330 fleet renewal case studies you've given us today show a pretty meaningful contribution margin improvement. So my question is, how should we think about Project Fish returns compared to the broader group and Project Sunrise?

Well, I might just take it at the group level. And obviously, each of the individual fleet programs that we put in place have a return that's above the cost of capital. But I think more holistically, and Ken mentioned this before, is we operate the group as an integrated value. And so with the investment that we're seeing in Qantas International, whether it's Sunrise, whether it's Project Fit is being monetized, not just directly in Qantas International, but also across Qantas Domestic and Qantas Loyalty.

And so we have a return on investment for this financial year of 32%. That is coming down as the invested capital increases. But as we said before, we expect to normalize, if you like, at a number that's higher than pre-COVID levels. So we're really happy with the returns, and we just want to get those aircraft here as soon as we can.

Your next question comes from Nathan Gee with Bank of America.

Maybe just a question on corporate demand. So can I dig just a little bit more into that weakness you're seeing in corporate and government and any signs of improvement in the forward book?

Well, I think -- thank you for the question. What we did see in quarter 4 and probably not unexpected that the trickle-down effect of the higher energy prices, moves in interest rates has actually impacted business confidence and what we saw in quarter 4, that there were some noncorporate and also government just actually reduced some travel demand or travel spend in reaction to that. But we have not seen that deteriorate. In actual fact, we've seen that stabilize. And that is actually what we are planning on for at least the first half, and that has been incorporated into the capacity settings that we've provided guidance on because that's a really important part of the levers that we have to manage in an environment where fuel is higher in the first half, but also based on the demand outlook.

But I think really importantly, to come back to that's a subset of the corporate market. It shouldn't be taken as an indicator of the whole market. And we are seeing really strong ongoing demand in the corporate market and the mining market in Western Australia, and that is continuing to grow. And we are also seeing the SME market continuing to remain really resilient.

And when we talk to SMEs, what we hear from them is how important face-to-face interactions are with suppliers or customers or their people. And so therefore, we continue to believe be really optimistic around that part of the business purpose travel market.

Your next question comes from Niraj Shah with Goldman Sachs.

One for Steph perhaps. What percentage of Jetstar revenues would be sort of Ansell at this point in time? What could or should that get to? Now that we've kind of rolled into a TRASK measure, I'm just trying to get a sense of what that should contribute over time.

Thanks for the question. We haven't given that breakup before. And -- but what I will say is we -- over time, in our planning, we will see ancillary proportion become a greater component of the Jetstar revenue. It's already over $1 billion of our revenue, we've said before. But what we will see is what we're trying to do to make sure our lead-in fare stays as low as it can in an environment where we've got those escalating costs is to unbundle as much as possible. And that means we can keep that lead-in fare low for the majority of customers, but we have the opportunity to charge for anything extra.

And obviously, we've launched a product in the last few weeks that's got a bit of attention around baggage, but we've got many more to come, to be honest. So we've got a whole pipeline of ancillary initiatives. It's hard to compare across airlines, I would just warn because many airlines when they report results include frequent flyer in their ancillary revenue.

And that often leads to more inflated numbers than maybe what I'm saying. But I think for Jetstar, it will be an increasing part of the mix, and I know for Qantas as well.

Thank you, Stephan. And just calling whether there's any more questions. I'm seeing that there might not be any on hold, but just wait a minute and moderator, if there's any questions that come in.

There are no further questions at this time.

Okay. Fantastic. Well, thank you so much for your time this morning. We are really looking forward to coming out and having more conversations with you all next week. So thanks again.

Good morning, and welcome to the First Half Financial Year 2026 Investor and Analyst Results Briefing. My name is Filip Kidon. I'm the Group Head of Investor Relations at the Qantas Group. I'd like to now hand over to our Chief Executive Officer, Vanessa Hudson, to take you through the results.

Thank you, Filip, and good morning to everyone. Thanks for joining us today at the Qantas Group Half Year 2026 Investor and Analyst Briefing. I am joined by Rob Marcolina, our CFO, who will be assisting me in presenting the results today, but I'm also joined by our entire leadership team. Today's briefing will only be in audio format, and Rob and I will take you through a number of the key slides in our materials that we lodged today, but then we will open to questions.

We will start on Slide 4 of our presentation with our results highlight. This has been another half year defined by execution. Our focus continues to be on delivering for our customers, our people and shareholders. By delivering these strong results for earnings, we can invest in the largest fleet renewal in our history. In summary, our underlying profit before tax for the half was up $71 million on last year. Our earnings per share at $0.68 was up 7%. Operating cash flow was strong at $1.8 billion, and we are delighted to announce that the Board has also improved an interim shareholder distribution of up to $450 million.

This includes a fully franked base dividend of $300 million, an increase of $50 million and an on-market share buyback of up to $150 million. Our performance is driven by 3 factors: one, the strong demand for travel across Australia and internationally; two, the reinforcing strength of our integrated portfolio, which includes our premium and low fares airlines alongside a world-leading loyalty program; and three, the emerging benefits to our customers, people and shareholders as we execute one of the largest fleet renewal programs in our history.

Fleet. The renewal of the Qantas Group fleet is accelerating. In this half, we invested $1.8 billion in fleet and other projects. This included 18 aircraft joining the fleet. Of these, 9 were new aircraft, including 2 A321XLRs for Qantas, 4 A220s for QantasLink, 2 A321XLRs and 1 A320neo for Jetstar. With Jetstar's fleet of A321s now at scale, we are seeing significant benefits in financial performance, customer experience and emissions reduction. In this half, our investment in A321LRs contributed to 60% of Jetstar's earnings uplift through efficiency and better aircraft utilization.

This gives us confidence in the benefits that will flow once the Qantas fleet reaches scale. We remain incredibly focused on all customer metrics, and it is pleasing to see this reflected in our operational and reputational scores. Our Qantas Net Promoter Score lifted 5 points and Jetstar lifted 4 points. Operationally, Qantas delivered 70% on-time performance, the highest of any major domestic airline, while Jetstar improved to 71%. Our customers have more to look forward to over the next 12 months.

Fleet deliveries, including our first Project Sunrise aircraft, cabin refresh programs on our A330 and also Jetstar 787s, refreshing our international lounge in Los Angeles and also Sydney, rolling out WiFi across our Qantas International fleet and progressive rollout of changes to our frequent flyer announced today.

Turning to our people. None of this would have been possible without the dedication and the professionalism of our 30,000 team members across the group. During the half, we increased our frontline workforce by 4%. We are investing in our people through leadership programs, improved staff travel and creating opportunities for development and career progression. Eligible employees are on track to receive another $1,000 in Qantas shares later this year. And we are excited to open a new Jetstar Perth cabin crew base later this year, creating 90 new roles. And Qantas will also reestablish a crew base in Singapore, supporting our growth in our international network.

Now turning to Slide 5. The strength of today's result reflects the deeply integrated value across our group. I'll now provide an overview of business performance and the CEOs of each segment will be here with me to give their perspectives during Q&A. So firstly, Qantas Domestic or Group Domestic. Group Domestic delivered strong performance with an EBIT of over $1 billion, up 14% last year and an EBIT margin of 18%. Group domestic capacity grew by 5% and RASK was up 3%. This reflects the strong demand across both leisure and business purpose travel.

Our dual brand strategy drives strong performance across all market segments, including business purpose, premium and low fares leisure. Jetstar Domestic had an outstanding half with earnings up 38%. EBIT margin was above target at 22%. Once again, the fleet renewal is a key driver behind Jetstar's success with its A321LRs and A320neo fleet now at scale. Qantas Domestic also saw strong demand, contributing to RASK growth of 2% as capacity grew by 4%. This was underpinned by business purpose travel growth and premium leisure growth supported by strong event demand. Qantas Domestic achieved an operating margin of 16% despite the ongoing investment into entry into service of its new fleet.

Group International, excluding Qantas Jetstar -- sorry, excluding Jetstar Asia and Jetstar Japan, saw its underlying EBIT impacted by 6%. This was due to cost escalations, including higher engineering and industry pressures, higher operational wages and commencement of training for new aircraft into Qantas International. We are offsetting these costs where possible and working across the industry to address what can be done to ensure this doesn't impact the affordability of air travel.

Capacity for Group International Airlines increased by 3%, reflecting the impact of the closure of Jetstar Asia in July. Jetstar International performed strongly with earnings from its Australian international operation up 9%. Jetstar International reached an operating margin of 14%, also above its margin target. For Qantas International, we continue to see strong demand, particularly in premium cabins on our long-haul routes. This half also saw the return of our final A380 to service, continuing to restore our U.S. market capacity.

Now to Loyalty. Underlying EBIT for loyalty was $286 million, up 12% on the prior year. Points earned were up 10 points and points redeemed grew by 17%. The program is growing at pace with Qantas Frequent Flyer membership now exceeding 18 million members. Engagement across our partner network remains a key driver with the number of members earning across 2 or more categories up 8% on prior year. Today, we are thrilled to unveil the most significant change to status in the program's history.

For the first time, we are giving tiered members the ability to roll over unused status credits into their next membership year. Even more exciting, we are breaking new ground by allowing members to earn status credits through everyday spending on the ground. This represents a new era for Frequent Flyer program in the face of changing loyalty landscape.

I am now going to pass to Rob to overview our financial performance.

Thanks, Vanessa, and good morning, everyone. We'll now turn to Slide 16 for a more detailed look at our financial metrics. Underlying profit before tax for the half was $1.46 billion, up 5% versus first half '25. Statutory profit after tax was $925 million, flat versus first half '25. Underlying earnings per share reached $0.68, a 7% increase, and the group's operating margin was 12.3%. For the half, operating cash flow was strong at $1.8 billion, providing a solid foundation for our ongoing capital requirements. Net debt ended the half at $5.6 billion. This remains at the bottom of our FY '26 target net debt range of $5.6 billion to $7 billion.

Net capital expenditure was $1.8 billion. There were $400 million of dividends returned to shareholders in the half. Total unit revenue and total unit cost both increased by just over 2%. This was driven by several factors, which I'll now explain as part of the group profit bridge. So if we now move to Slide 17. On this slide, I'll walk through the key drivers behind the year-on-year increase of $71 million in our underlying profit from first half '25 to first half '26. For the half, group capacity increased 4% and coupled with a moderation in oil prices, saw $122 million in contributions during the period.

Group RASK grew by 3% across both domestic and international. As previously guided, our transformation program is weighted to the second half, and we remain on track to target $400 million for the full year to offset ongoing CPI pressures. Depreciation and amortization increased $89 million, reflecting the acceleration of our fleet renewal program. The ramp-up in fleet renewal saw the business incur fleet-related EIS costs. These increased by $10 million for the period. Net industry costs increased by $40 million. Underlying airport security and navigation charges continue to escalate above the rate of inflation. Profit was impacted by $76 million from unfavorable foreign exchange movement across nonfuel costs during the period and Jetstar Japan's lease liability.

Turning now to Slide 25. We want to highlight the important role that the new fleet is playing to grow our profitability. Jetstar has delivered a stellar performance in the half and fleet investment is a key driver. The 321LR and the 320neo aircraft are providing significant replacement benefit. This includes lower fuel burn per seat and reduced maintenance costs. However, the fleet renewal extends beyond replacement benefits. Because these aircraft are more efficient and have longer range, we are seeing a step change in utilization, allowing us to launch new short-haul international routes.

And by deploying the 321LR onto these shorter international sectors, we have been able to redeploy our 787 wide-bodies on to longer, higher demand markets like Japan and Korea. For the first half '26, the contribution of these was approximately 60% of Jetstar's underlying EBIT growth. This gives us confidence as the Qantas fleet renewal reaches scale.

Now turning to Slide 31. Our long-standing financial framework is core to maintaining our financial strength. It's designed to structurally maintain low leverage, strong liquidity and an investment-grade credit rating. It also guides capital allocation, including opportunities for capital recycling to maximize group value through the cycle. An example of this is the closure of Jetstar Asia in July. And recently, we announced our intention to sell our stake in Jetstar Japan. This allows us to focus on our core business in Australia. As previously guided, capital expenditure for FY '26 is expected to be $4.1 billion to $4.3 billion.

Today, we are also providing guidance for FY '27, which is expected to grow to $5.1 billion to $5.4 billion. This reflects the acceleration of our fleet renewal program, including the arrival of the first 4 Project Sunrise aircrafts. We are confident in the earnings and cash flow growth from this fleet and our Jetstar result demonstrates this. We are committed to a base dividend that is sustainable through the cycle. And as Vanessa mentioned, we are delighted to share that the Board has approved an interim FY '26 shareholder distribution.

This includes a fully franked base dividend of $300 million, which is a $50 million increase over the first half '25 base dividend. This demonstrates our commitment to delivering sustainable value to our shareholders. We've also announced an on-market share buyback of up to $150 million. So whether it's the decisions about which routes to fly, which brands to fly or how to adjust the portfolio, we remain focused on ensuring optimal capital allocation across the group.

I'll now hand back to Vanessa, who will go through the outlook.

Thanks, Rob. So we're now on Slide 35. The Group continues to see strong travel demand across the portfolio. We expect Group RASK to increase in the second half compared to the prior year, made up of the following. So Group RASK is expected to increase approximately 3% versus last year, while Group International RASK is expected to increase between 1% and 3%. This includes the impact of Qantas International capacity growing at a faster rate than Jetstar International. Entry into service and fleet-related transitionary costs will increase by $20 million versus the second half of '25.

The gross impact of Same Job Same Pay in the full year '26 is now expected to be approximately $95 million, a $15 million increase on the second half of '25. This is expected to be mitigated over time. Qantas Loyalty is expected to grow underlying EBIT between 10% to 12% for the full year '26. And finally, net freight revenue in the second half of '26 is expected to be in line with the second half of '25. Our outlook slides provide further detail on specific line items, including fuel cost depreciation, transformation and the latest estimates on the closure cost of Jetstar Asia and restructuring costs.

We also have our latest capacity guidance on Slide 36 of the investor material. So in closing, this is an exciting new era for the Qantas Group. We're seeing the benefits of our fleet renewal flow through to customer experience, operational performance and financial results. We're investing in our people and our network, and we're building on the momentum that we've created. By consistently delivering strong earnings growth through our dual brand strategy, we can invest in our customers and our people while also rewarding shareholders. I would like to close again by thanking our 30,000 team members for making this result possible.

And now I'm going to hand over to the moderator, and we look forward to answering your questions.

Your first question comes from Anthony Moulder with Jefferies.

If we can start with Domestic. I think strong Domestic capacity growth we've seen across the market, particularly in that December quarter and particularly on the triangle. Just referencing back to obviously the AGM commentary around corporate yield or corporate RASK slowing. Just talk to what you're seeing as far as corporate growth and the outlook for second half '26, please?

Yes. Thanks for that, Anthony. And I think that what we have said, and I'll pass to Markus and Steph to just comment on demand as a whole. But I think it's fair to say that we're continuing to see a very strong travel demand environment across our domestic brands.

And I'll pass to Markus now to just comment on both premium leisure and business purpose travel.

Thanks, Vanessa. Anthony, just on demand, we continue to see strong demand, both as Vanessa mentioned, premium leisure as well as business purpose travel. And when you look at business purpose travel, it's really the small and medium enterprise market as well as resources market in WA that is particularly strong. So -- and we see that continuing to the second half. So we're confident with the capacity we're putting in, in the second half, it's going to address that demand.

And I think just some of the comments that I'd make on business purpose travel. I think what we are seeing in this market is the small to medium-sized business really growing and outperforming. And that was a result of the 6% increase in revenue that we saw for business purpose travel. As you say, in November, when we did update around the AGM, there was in the non-resource corporate market, there has been some lower-than-expected growth. However, that has been offset by the strong performance in the SME market and also resource and mining market. But Steph, on Jetstar?

Yes. And I will just -- before I talk about low fares demand, also just say from a small business perspective, which is really important is we also look at how the dual brand plays into that. So Jetstar, obviously, if there's price sensitivity for business purpose, small business, particularly, how Jetstar plays a role in supporting Qantas with that is really important. But on the more price-sensitive leisure and we've seen really strong demand continue through this half, very strong events calendar that looks strong into the second half as well. And when we look at all of our data around intention to travel, the Australian love affair and prioritization of travel has certainly not waned. So we're seeing really strong demand for low fares travel.

Your next question comes from Matt Ryan with Barrenjoey.

I had a 2-part question on the distribution. The first is just, I guess, motivations around the buyback, whether that had anything to do with franking balances or just the decision-making around that. And then the second part of that is maybe just to understand your messaging around the dividend and the buyback. I think if we go back to sort of the pre-COVID period, you were paying a base dividend and then you top up with buybacks depending on where you ended up with free cash. Is that the same sort of methodology that we should be thinking about from now on?

Yes, Matt, thanks for the question. So I think the first thing to say is that we're obviously continued to be guided by the financial framework. So we were delighted today to be able to announce an increase in the base dividend. And the way that we've described the base dividend previously is the same, which is we expect that, that will be sustainable through the cycle. So moving that up to $300 million per half or $600 million per year was really important.

I think the point on additional distributions, we've always said we would stare into the decision around whether that would be paid through dividends or whether it would be paid through a buyback. Obviously, different shareholders have different perspectives. We absolutely have franking credits that can continue to be utilized, but at this point in time, we saw value in the share price with regards to doing the buyback. So it will be consistent and it has been consistent, and it will be consistent in the way we consider it going forward.

Your next question comes from Jakob Cakarnis with Jarden Australia.

Just wanted to focus on Qantas International, if I could, please. It looks like you're getting inflation type yield growth there, but I'm just interested in marrying together still quite high capacity growth through the second half for the Qantas International brand and now an adjusted RASK guidance. Could you just help tie all those together for me, please?

Yes. Look, I might just make a few comments broadly on Qantas International and for the specifics, I'll pass to Cam. You mentioned, Jake, ASK growth. And I think it's really important to mention in this moment that the A380 is a critical part of Qantas International ASK production. And that is a really important part of the integrated value and the value that Qantas International provides across the group. Bringing back 10 A380s, we believe, was the right decision and obviously was contributing to the capacity growth that you saw this year for Qantas International.

The reason why those 10 A380s are important, it is important for scale. It's important for resilience, and it was important for us to finish reestablishing our network post COVID, which has only really just happened. And I think that, that is a really important part of the overarching narrative for Qantas International until we can renew the international fleet, that A380 fleet is going to be a core part of that ASK production.

So I'll now pass to Cam to just talk a little bit about how we're seeing the A380 deployed, how we're pivoting some of that capacity in the light of some demand and also cost.

Yes. Thanks. I mean I think it's a good question. And -- you'll see from the outlook and the announcements we've made, we're making some material changes to where we deploy that capital and capacity in the near term. So having A380 come back has given us the flexibility. We positioned that into Dallas because that's second largest airport in the world, 930 connecting flights on AA every day. So it gives us a diversified revenue pool. But clearly, when we look at the U.S.A., we're going pretty well out of point-of-sale U.S.A., we're making significant gains in that market.

And actually, premium travel is holding up pretty well. Where we're seeing some suppressed demand is ex Australia and the leisure segment. So we are making some capacity adjustments as we should do. We're going to be quite nimble and fluid on that. So we're switching 3 A380s from North America into Singapore. We're also redeploying some capacity from L.A. into Vegas from December to March. Now in terms of the net impact of capacity into North America, we'll be actually down 2%. So we're managing our capacity into that market given the conditions.

But also the market between Australia and U.S.A. is only at 88% of COVID. So it actually hasn't come back at the moment as well as the one-stop capacity is not as frequent as it was before COVID as well. So we think we're going to manage that well. The other thing I'd say is where we're seeing really, really strong results is when we do get the benefits of new technology. So a proof point of that is Brisbane to L.A.

So we swapped out not an A380, A330 for a 787. We've seen a 15% increase in the margin of that, and we expect to see a better increase in the second half of the year. So the incremental proof points from Jetstar from Domestic are coming through even in the International market. And we remain confident that we have the right aircraft on the right route. And importantly, with the right configuration to absorb that premium demand that we can get good demand and good returns.

The next question comes from Andre Fromyhr with UBS.

Just following on from the discussion about the International Market. I'm wondering if we just understand a bit more of the Sunrise economics based on the information you've shared today. There's a comment about the RASK premium, for example, that you're getting on the direct Heathrow services. Can you just remind us, is that the level of RASK premium that you require on the Sunrise ultra-long-haul services? And how much of that is likely to be explained by just a favorable mix towards the premium cabin as opposed to a like-for-like change in the ticket price that Sunrise customers are paying?

Yes. So let me answer a few of those questions, and then I'll pass to Cam just to give an update on where we're at with Project Sunrise. We are continuing to be really optimistic around the proposition of Project Sunrise. And as you say, it is confirmed by what we are seeing on those longer haul routes that we are flying, both Perth to London and also Auckland to JFK. We are not seeing the demand abate in terms of customers seeking not just that premium experience, but that proposition that, that ultra-long-haul point-to-point flying delivers, particularly out of Perth, but now we're seeing the same thing out of Auckland.

The 2 things on the business case or what do you need to believe for Project Sunrise. It is the most significant uplift is not about a fare increase. So we're not increasing our fares, but what we are going -- what we do believe is that we are going to be able to have more of the higher fare classes available for longer. So you'll actually get an effective premium uplift from the demand that we expect to see. It's not -- it's a very small component on the uplift, which is driven by the cabin seating mix. And let me just kind of give you a sense of what -- when we did the Project Sunrise business case, London was attracting around about a 10 -- 19 to 10-point uplift in premium yield versus the one-stop either via the Middle East or Singapore.

We've actually now seen that improvement on Perth London, and it's now at around about 22%. That is basically in line with what you need to believe and is what we assumed in the business case for Project Sunrise. So again, I think it gives us ongoing confidence that Project Sunrise is going to really hit a very premium part of the market that we know our customers are seeking. But do you want to give an update on Sunrise?

Yes. I mean I think 2 things I'd say. One is we're seeing incremental confidence internally about the modeling and the yield premium given the density of the premium cabin will have on that aircraft. And we have now got more and more data on those ultra-long-haul point-to-point services, not just actually London, whether it's JFK, whether it's Melbourne, Dallas, whether it's Perth to Rome. Those are the city pairs that are performing well for us with the right technology and the A350 ULR just takes that to the next step.

The other thing I'd say is given the capacity of that aircraft, which is only 238 seats, it's going to be complementary to what we do, complementary to Perth London, complementary to our flights over Singapore to London, complementary to the services we have over Dubai with our partner with Emirates. So we're going to be able to offer our customers a whole raft of options, one stop as well as a premium service, which is the only one in the world, which will be nonstop.

And we talk a lot about integrated value, but integrated value is going to be incredibly important for Project Sunrise because the Qantas Frequent Flyer program is a premium demand engine for us, and it does create that self-reinforcing customer loyalty, which is very hard to be replicated in this market. So all our proof points give us incremental confidence about, one, the business case, but two, the customer proposition.

Your next question comes from Justin Barratt with CLSA.

I just wanted to ask you about your long-term margin targets for your airline businesses that you raised at the 2023 Investor Day. I just wanted to ask, has there been any consideration around, I guess, reconsidering them going forward? Jetstar seems to already, I guess, be there. You've got improving reference points, I guess, from the benefits of the new fleet in that business and how that could pertain to your Qantas business. And then obviously, it sounds like the outlook for Project Sunrise is relatively encouraging as well. So I just wanted to see if there's been any thought around reconsidering those long-term targets?

Justin, thanks for your question. And I think we continue to reiterate the targets because they remain the targets. So I think if you think about the Jetstar performance and as you've just articulated where they're at against their targets that we're already there. And so now it's absolutely about growing the bottom line with regards to those targets within Jetstar Domestic, but both in Jetstar Domestic and also International. I think on the Qantas side, if you think about Qantas Domestic, that 18% target, we still maintain coming in at 16% for this particular half.

But what we've said is as we move through from an EIS temporary and transitionary cost perspective that we expect to be at that 18% for Qantas Domestic. And then I think from a Qantas International perspective, obviously, we're at 6% now. We have put out there that 8%. We still believe in that. That is in a pre-Sunrise environment. We're obviously now cycling through Same Job, Same Pay.

There were a number of other costs which we would say are transitory in the QAI business that gives us confidence to get to that 8%, but we have to go through the EIS. And then obviously, Cam has just talked to Project Sunrise, which we've said before is an incremental $400 million of EBIT, which would get us up to that 10% to 12%. So we remain committed to those targets. The businesses were at almost different perspectives with regards to the targets, but they remain the targets.

Your next question comes from Owen Birrell with RBC.

Just a couple of questions from me. The first one is just on the earnings skew first half, second half, whether you're expecting a more normalized 60-40 skew in the profit before tax for this year? And second question is just on -- thanks for the net CapEx guidance for '26 and '27. I'm just wondering what you're assuming for asset sales in both of those years and particularly given the Jetstar Japan proceeds are probably going to be received in '27.

Yes. So just on the -- firstly, on the earnings in terms of the seasonality, we are expecting sort of that 60-40 sort of returning to that. So that would be the first question. In terms of net CapEx, we're not making an assumption with regards to proceeds from asset sales. With regards to Jetstar Japan, we've talked about the fact that we have signed a nonbinding MOU. That will be finalized over the next few months up to July, but then probably would not be closed until the end of the next financial year. So we wouldn't be expecting anything material to come in, in FY '27.

The next question comes from Sam Seow with Citi.

Just a quick question on Loyalty. Just noticing your redemption stepped up quite materially there in the first half of '26. Potentially, if you could just give us some color on that and what's driving that? And then just any update on the surcharging?

Yes. Thank you. I'll pass it to Andrew.

Thanks for the question. Half-on-half redemptions, the primary driver around that is the full half impact of the rollout of Classic Plus on the Domestic network. So that's why you're essentially seeing the increase half-on-half towards sort of 18%. In terms of the RBA, look, I think for us, we wait like other interested parties in terms of what the RBA handed down in March of this year. In terms of speculating what may come of that from a surcharge and interchange perspective, I don't think I need to do that. I think for us, it is waiting until what comes of March, and then we're happy to have the conversation from there.

Yes. And I think just to add to what Andrew said, we remain really confident in the program. And based on whatever the RBA does, we remain really confident to be able to manage through that with our partners. We've also clearly continuing to invest in members, and we -- we'll see and -- from the results of Classic Plus, but also today, a lift in Loyalty and hopefully share of wallet. And then finally, I think when the RBA does make their announcement, we continue to be committed to the 2030 overall margin target. So I think that we feel confident where we're at.

Your next question comes from Nathan Gee with Bank of America.

Maybe just a question on seat loads. Can you just talk about what's driving those softer loads, both on Qantas Domestic and International? And would you characterize this as normalization? Or are you hoping to call some of this back in the future?

Markus?

Yes. Great question. Thank you. So when you said seat factor had slightly dropped, it's a combination. Yes, it's back to where it's been in the long term. But what's really driven this is 2 things for us. One is we cancel less flights as our operations got better. So you don't have that consolidation on the day of travel into fewer flights drive seat factor. And second, also, we continue to grow in the resource market. That market is quite different and operates in about 10, 15 points lower seat factor. So as that becomes a bigger part, it also drives down the average.

Yes, and for international, the primary drivers in the economy class, Kevin, with the A380, given the size and unit of that capacity, it's more at a normalized level. But I would say we are looking at ways and means in terms of digitalization and new tools to stimulate load factors. So it is an opportunity.

Your next question comes from Ian Myles with Macquarie.

Western Sydney Airport, I'm just interested in what the cost implications and the opportunities might be as you're probably coming pretty close to having to make decisions around planes going there.

Yes. Look, we see Western Sydney Airport as a great opportunity. We're going to be starting freight services there in July, so very soon. And this we see is a fantastic market for Jetstar and -- but we're still in a commercial negotiation with Western Sydney, and I might just get Rob to comment on where we're at.

Yes, absolutely. So I think as Vanessa said, I mean, we haven't had a new airport in Australia for decades. So we're really excited about the opportunity. This particular part of Sydney is a growing metropolitan area, so -- which is great. On freight, we have -- we're just about finalizing the build-out of the shed there, 24-hour no curfew airport.

So I think that's going to really assist the freight business. But as Vanessa said, on the passenger side, we're not there yet. The pricing and the cost is going to very much determine the extent of the network that we have in Western Sydney, but we do see a pathway, and we're working through with Western Sydney Airport management at the moment.

Your next question comes from Cameron McDonald with E&P.

Just on Qantas International, I appreciate the sort of the color on the slide. But can we get some more granularity around the cost performance given that's what seems to have driven the sort of the less-than-expected performance out of that division? And how much of those costs will repeat in the second half and then potentially drop out in the full year when we look into FY '27?

Yes. So the kind of 3 primary drivers of cost. One was labor, and that includes Same Job, Same Pay, but it's broadly across many of the operational areas. The second one is engineering investment. So obviously, with the age of the A330s and A380s, we have been investing more to ensure our engines and our airframes have enough resilience to meet our on-time arrival objectives, and that's been pleasing that those have been met, and that's actually coming through in our Net Promoter Score. So that's pleasing.

And then the last one is the start of our entry into service costs. Firstly, for the Finnair aircraft that are coming into the fleet. And the second one is the start of the A350 pilot training, which has now started for the entry into service for the Sunrise aircraft. Clearly, we're making moves to do everything possible to reduce those costs. An example of that would be the announcement we made this morning on establishing a Singapore base, which when it's at full establishment will be up to 650 at the end of year 5. That will help us with cost, but it will also help us with operational resilience as well. So some of the costs are reoccurring and some of them are one-off.

Yes, there is a component this year of the labor cost that as we enter EBAs, we'll have one-off restatement of leave provisions. So I think that is a key part. And also as the entry into service costs start to build, as Cam said, these are -- we are going to see this grow. And we are going to make sure that we continue to deploy the aircraft as most efficiently as we can to the markets where we see the highest demand.

And so you are going to see this focus on making sure that we are agile, that we are deploying the capacity to markets where we can get a greater return. Las Vegas being one, I think, is really important and relocating one A380 to Singapore at the second half of this year is going to be a key part of that. I would actually say that the investment that we're making into the fleet, both A380 and 330 is a critical part of us continuing to generate demand and the premium that we are seeing across our fleets, and that is a really important part of delivering on that customer promise.

Sorry, how much was that engineering investment in the period, please?

No, Cam, we haven't been specific about that. But I think the point that the guys are making as well is that, that investment is something that's now in the base with regards to the investment being then helping with on-time performance and NPS.

And the other thing as well to say is that we do see this demand effect on the U.S. is short term. And I think that we remain optimistic in the half that we're in with the Aussie dollar back above $0.70. We know historically in those environments that the U.S. becomes a much more attractive destination than perhaps where it's been in the past, which has been more costly.

Your next question comes from Niraj Shah with Goldman Sachs.

Just had a question. I thought the Jetstar case study was pretty useful. How should we be thinking about -- and a useful lead indicator. How should we be thinking about the implications for Redtail as it renews its fleet? Just any considerations versus the chart that you've presented, the splits between cost efficiencies, growth and sort of redeployment flexibility would be great.

So we have actually, Niraj, provided as a part of the supplementary pack, which we've actually provided in the past, a reconciliation of the EBITDA uplift for Jetstar for the 220s and the XLR, and we've also provided profit outlook for Sunrise. So I think that, that is a good way of assessing the uplift that may come for Qantas with the 220 and the XLR.

The only point that I would say is that, that EBITDA uplift is more a like-for-like comparison, but it does not account for the utilization benefits that Jetstar has been able to get in the way in which we deploy those aircraft. And so that reconciliation that is in the supplementary slides, I think, is the best useful metric to see those comparisons and estimate the benefits of flow for Qantas, but there is further upside, I think, for Qantas as Jetstar is seeing in terms of utilization.

And Niraj, maybe just to follow up. We will bring a case study in the 220s and then the XLRs. So we'll increasingly bring those proof points as those fleet types reach scale, which is what the Jetstar one has done. And just to Vanessa's point around the utilization advantages around growth, we've today put on Brisbane to Manila on the XLRs, which again is going to be its own proof point within the XLR. So we will -- as I said, we will bring those to market as we get those aircraft up to scale.

Your next question comes from Joseph Michael with Morgan Stanley.

I just had a follow-up on Project Sunrise, where I guess you seem confident that the demand will be there. But my question is, if demand or yields underperform expectations, what flexibility do you have to either redeploy the aircraft, change configuration or slow future deliveries?

I think we've always said that in any scenario, we want these aircraft. They are high-performance aircraft. We are a country that is a long way away. So this is, I suppose, strategy that we've got, which is to renew the Qantas wide-body fleet to those that have got high-performance, long-range, high premium density seat mix. In all scenarios that we've modeled, these aircraft are a no-regret purchase.

And so we don't believe that the demand is not going to be there from what we're seeing. But if there were to be some change, we would redeploy these aircraft. And quite possibly, you would see the accelerated retirement of the A380. So I just want to make the point that we don't see that there is any regret scenario where these aircraft are not going to be a valuable part of the Qantas International fleet. I think that's the last question.

Your last question comes from Scott Ryall with Rimor Equity Research.

I think it might be pretty quick given the answers you've just given around the context of softer international earnings, the costs you've taken on and some of the capacity. I just wondered, could you just remind us the lead time for managing Qantas' International capacity? And you give us an outlook, obviously, that's a few periods earlier. But in terms of how you manage internally, how do you think about that?

Yes. I mean we're probably a lot more flexible and nimble than historically we have been. Usually, the booking period is out to 12 months, but we usually work on a season by season, so 6 months we usually change our settings. But we can be more nimble than that, certainly on short-haul international markets where the booking window is more condensed. But if you look at our markets, we look at weekly intakes and we're making decisions on capacity, either frequency, gauge of aircraft or redeploying capacity where we see fit.

And I think you're seeing that industry-wide. There's more seasonality coming into International markets. We're seeing good support of the likes of Sapporo. We think Rome has also done well. We think Las Vegas is going to go. So you'll see more agile capacity network management and you'll see more seasonality, and we'll be looking to redeploy those 787s, which is our unit of capacity, which is performing really, really well for us. And we see a scenario where the A350s come in with that premium density, that's absorbing the growth that we see in the market. The market supply for premium seats is under the market demand at the moment.

Thank you. I think that's it for the questions. Look forward to seeing you all over the next couple of weeks, and thanks for your time.