Owners of Qantas Airways Ltd (ASX: QAN) shares need to know what the airline plans to do with its profit generation in the coming years. This is big news from the airline, as far as I'm concerned.

When the COVID-19 pandemic hit, the airline's profit and share price were smashed. However, things are looking much better for the business now.

In the first six months of FY25, Qantas reported it made $1.39 billion of underlying net profit before tax (up 11%) and statutory net profit after tax (NPAT) of $923 million (up 6%).

The company said its performance was driven by its strategy of having both the Qantas and Jetstar brands, with demand "remaining strong across all customer segments". Qantas and Jetstar's domestic and international businesses delivered increased profitability, carrying almost 10% more customers. Premium and corporate travel remained strong.

What was really pleasing to see was the company's announcement of some important news about shareholder returns for the short term and long term.

Ongoing dividends

The airline decided to declare an ordinary fully franked dividend for shareholders amounting to $250 million (equating to 16.5 cents per Qantas share) and a fully franked special dividend totalling $150 million (or 9.9 cents per share). It has been paying dividends to shareholders for the first time since 2019.

Receiving dividends is pleasing because it means investors don't need to do any work for them. Dividend payments also suggest to me that the board is confident about the business's outlook and balance sheet.

What I found particularly pleasing was the company's comments about its intended dividend payments going forward.

Qantas said it's generating sufficient franking credits and expects to pay a fully franked base dividend of $250 million (16.5 cents per Qantas share), which could be "sustainable through the cycle."

With the base dividend equating to a grossed-up dividend yield of 2.5% (including franking credits) at the current Qantas share price, that's a decent cash return for investors in the coming years. Including the special dividend, investors are receiving a grossed-up dividend yield of 4% (including franking credits) as a result of the recent Qantas report.

I think it makes sense for the airline to pay dividends rather than continue with the share buyback because of the high price of the Qantas share price. Leadership should be as careful as an independent investor buying shares on the market so they don't pay a price that's too high.

Qantas share price snapshot

The airline's shares have risen more than 80% in the last 12 months, as shown on the chart below.