Qantas has issued a market update outlining how the conflict in the Middle East and a sharp rise in global refining margins are reshaping its FY26 expectations.
Jet fuel prices have more than doubled since the airline’s 1H26 results, with refining margins spiking from US$20 to around US$120 per barrel. Despite hedging around 90% of crude exposure, Qantas remains exposed to these refining costs and now expects a 2H26 fuel bill of $3.1–$3.3 billion.
The airline says fuel supply remains stable into May and continues to work with government and suppliers as geopolitical uncertainty persists.
Network and Demand Shifts
While Qantas does not operate direct Middle East services, it has supported customers booked on partner airlines with additional flexibility. Strong demand for Europe has prompted the Group to redeploy capacity from the US and domestic network to increase flying to Paris and Rome.
Domestically, capacity will be reduced by around 5 percentage points in 4Q26, with affected Qantas and Jetstar passengers offered alternative flights or refunds.
Revenue remains resilient: Qantas now expects International RASK growth of 4–6% and Domestic RASK growth of around 5% for 2H26 — both upgrades on previous guidance.
Financial Position
The Group says it remains financially strong, with FY26 capital expenditure expected at or below $4.1 billion. The $300 million interim dividend will be paid on 15 April, though the planned $150 million share buyback has been paused due to market conditions. Net debt is forecast to remain within the target range by 30 June.
Total Group capacity for FY26 is expected to grow 3% year‑on‑year, with Qantas signalling it will provide further FY27 guidance once the external environment stabilises.