Qantas raises fuel bill to A$3.1–3.3B

Qantas raised its estimate for second-half fiscal 2026 fuel costs to A$3.1 billion-A$3.3 billion in an April 14 market update, from a previous A$2.5 billion forecast. The airline said the increase reflected a sharp rise in jet fuel prices and refining margins after disruptions tied to the Middle East conflict. It said the revision was inclusive of hedging, carbon costs and transformation benefits. Qantas also said it was working with the Australian government and suppliers on fuel availability for the remainder of April and into May. ### Why did the fuel bill jump so sharply? Qantas said jet refining margins had risen from about US$20 per barrel in February to a peak of around US$120 per barrel. The airline said it had hedged about 90% of its second-half fiscal 2026 crude oil exposure but remained largely exposed to movements in jet refining margins, leaving it vulnerable to the latest spike. (qantasnewsroom.com.au) The revised range implies an increase of roughly A$600 million to A$800 million from the prior A$2.5 billion estimate. Reuters-based reports carried by RTÉ and Channel News Asia said jet fuel prices had more than doubled, adding to pressure on airline costs. (qantasnewsroom.com.au) ### What exactly is and is not hedged here? Qantas said its hedge book covered crude oil rather than the full jet fuel price. That distinction matters because airlines buy refined jet fuel, and the gap between crude prices and jet fuel prices can widen when refining margins surge. Qantas said that was the main driver of the revision. (rte.ie) The company’s prior guidance had been given with its first-half fiscal 2026 results in late February. Third-party summaries of that guidance said management had then expected second-half fuel costs of about A$2.5 billion. ### Does this mean an immediate fuel supply shortage for Qantas flights? (qantasnewsroom.com.au) Qantas said suppliers and the government continued to provide confidence in fuel supply for the remainder of April and well into May. The company’s update framed the issue primarily as a cost shock rather than an immediate inability to source fuel. (investor.qantas.com) The Independent reported on May 23 that Qantas had cited rising jet-fuel prices and hedging gaps as second-half flights absorbed higher fuel expense. That report placed Qantas alongside other carriers warning about higher summer fuel costs, though some airlines said they had secured enough supply for scheduled operations. (qantasnewsroom.com.au) ### Did Qantas change operations as costs rose? Qantas said in the same April update that it had reduced domestic capacity in the fourth quarter of fiscal 2026 by about five percentage points. Reports based on the filing said affected Qantas and Jetstar customers would be offered alternative flights or refunds. (qantasnewsroom.com.au) ABC reported on April 14 that most of the cuts were on routes between major Australian capital cities. Qantas linked the move to fuel price volatility and broader economic conditions. ### Where will investors look next? Qantas’ investor results centre lists the April market trading update alongside its first-half fiscal 2026 results, where the airline reported underlying profit before tax of A$1.46 billion. (finwires.com) Any further change in refining margins or fuel availability would likely show up in subsequent market updates and the company’s full-year fiscal 2026 results materials. (abc.net.au) (investor.qantas.com)