Qantas Airways Limited

What does it do?

Qantas is Australia's national airline, founded over 100 years ago and one of the most recognized brands in the country. It flies passengers and cargo both within Australia and to destinations around the world, including London, Los Angeles, and Tokyo. It also runs Jetstar, a budget airline that competes on price for cost-conscious travelers across Australia and Asia. Think of it like owning both a premium airline and a budget airline under one roof.

How does it make money?

Qantas makes money by selling plane tickets across four main business units: Qantas Domestic (flights within Australia), Qantas International (overseas routes), Jetstar (budget flights), and Qantas Loyalty (its frequent flyer program). Revenue grew from $21.9 billion to $23.8 billion in the latest year, with net income — the actual profit left after all costs — coming in at $1.6 billion. The loyalty program is particularly valuable because it earns money by selling points to banks and partners like credit card companies, even when planes aren't full.

Why do investors care?

Investors are interested because Qantas has pricing power in a market where it faces limited domestic competition — it and Virgin Australia dominate Australian skies. The loyalty program is a hidden gem; it generates high-margin, recurring revenue that doesn't depend on jet fuel prices. The big question is whether Qantas can manage its cost base — staff, fuel, and new aircraft — while keeping ticket prices high enough to sustain these profit levels.