Qantas Airways is bracing for a significant hit to its finances as rising jet fuel prices threaten to inflate its costs by as much as $800 million in the latter half of the year. The airline announced this development on Tuesday, attributing the surge in prices to the ongoing conflict in the Middle East.
The geopolitical tensions have caused jet fuel prices to skyrocket, more than doubling and maintaining a precarious volatility, according to a recent market update from Qantas. As a result, the airline now anticipates its jet fuel expenses for the second half of 2026 to reach between $3.1 billion and $3.3 billion. This is a sharp increase from the previous estimate of $2.5 billion.
In response to the situation, Qantas is actively collaborating with the Australian government and fuel suppliers, who have assured a steady supply of jet fuel at least through April and well into May. Despite these assurances, the airline remains vigilant.
“Given the ongoing uncertainty in global fuel supply chains, we are closely monitoring the situation,” stated the airline group. To counteract the financial strain from the Middle Eastern conflict, Qantas has implemented various strategies, including adjustments to its international network, capacity management, and fare increases.
“We are closely monitoring the situation given the ongoing uncertainty in global fuel supply chains,” the airline group said.
“The Group has taken action to mitigate the impact of the conflict in the Middle East, including international network changes, capacity adjustments and fare increases.”
Qantas said it was benefiting, however, from a boost in demand for travel to Europe as passengers avoided Middle East routes.
“In response, the Group has redeployed capacity from the US and its domestic network to increase flights to Paris and Rome.”
Qantas said unit revenue on international routes was now expected to grow by 4-6 per cent year-on-year in the second half of 2026 — double its previous forecast.
For domestic flights, revenue was set to rise by about 5 per cent, up from its previous expectation of a 3 per cent increase.
Qantas said it may have to take further action on fuel prices.
“The Group continues to closely monitor the dynamic environment and retains optionality to take further actions to mitigate fuel cost increases over time.”
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