Qantas warns of £400m fuel hit

Qantas said on April 14 it expects up to A$800 million in extra fuel costs in the second half of fiscal 2026 and will cut domestic flying to offset the shock. (announcements.asx.com.au) The airline told investors its second-half fuel bill is now forecast at A$3.1 billion to A$3.3 billion, up from A$2.5 billion. Reuters, via Channel News Asia, said the jump followed a Middle East war that Qantas said had pushed jet fuel prices to more than double and left them “extremely volatile.” (channelnewsasia.com) Qantas said it has raised fares, changed parts of its international network and reduced domestic capacity by about 5 percentage points in May and June. ABC reported that most of the domestic cuts are on high-frequency routes between major Australian capitals, and affected Qantas and Jetstar passengers are being offered alternative flights or refunds. (abc.net.au) The carrier does not fly to the Middle East, but the conflict is still hitting its costs through the price of refined jet fuel. Qantas said it has hedged about 90 per cent of its crude oil exposure for the second half of fiscal 2026, yet remains largely exposed to jet refining margins, which it said rose from about US$20 a barrel in February to a peak near US$120. (announcements.asx.com.au) Qantas is also shifting aircraft toward routes that are holding up better. The airline said demand for Europe has strengthened as travelers avoid Middle East routings, so it has redeployed capacity from the United States and domestic network to add flights to Paris and Rome. (abc.net.au) That change is feeding through to revenue forecasts. Qantas said international unit revenue in the second half of fiscal 2026 is now expected to rise 4 to 6 per cent year on year, while domestic unit revenue growth is expected at about 5 per cent. (channelnewsasia.com) The warning lands less than seven weeks after Qantas reported a strong first-half result for fiscal 2026, with underlying profit before tax of A$1.46 billion for the six months to December 31, 2025. In that February 26 update, Chief Executive Vanessa Hudson said new aircraft deliveries and strong demand were supporting earnings. (announcements.asx.com.au) The airline said fuel suppliers and the Australian government still expect supply to hold through the rest of April and well into May. Qantas also said it may take further action if fuel costs stay high, leaving passengers and investors watching whether the current fare increases and flight cuts are only the first round. (channelnewsasia.com)