The Middle East war continues to weigh on Australia’s biggest airline, despite strong demand for international and domestic travel.
Qantas is still contending with high jet fuel costs driven by the conflict, which shaved hundreds of millions off its last annual profit.
The carrier has now put aside $3.8 billion to cover its fuel costs for the first half of the new financial year, and says it’s hedged, mainly for Brent crude oil, for about 85 per cent of its annual bill.
“Fuel prices are expected to remain elevated through financial year 2027,” it said on Friday ahead of its annual general meeting of shareholders.
In August, Qantas reported a 2025/26 net profit of $1.3 billion, down 19.8 per cent on the previous year.
Its underlying pre-tax profit also fell by 13.8 per cent to $2.1 billion, despite a 7.1 per cent rise in revenue to $25.5 billion.
The airline has already cancelled a planned $150 million share buyback and could still raise fares in response to high costs, with Brent crude oil now sitting above $US100 a barrel, from around $US60 before the US attacked Iran in February.
“The group has and will continue to adjust fares and capacity in response to higher fuel costs,” Qantas said.
Meanwhile, the carrier is still forecasting revenue-per-available-seat-kilometre (TRASK) – a core metric used by the airline industry to measure unit revenue – to rise by up to 10 per cent in the first half of 2026/27 mostly driven by international travel.
“International demand across Qantas and Jetstar remains strong, supported by customers redirecting travel away from the Middle East,” it said.
“Domestic leisure demand remains strong.”
Corporate and government travel remains stable and is being closely monitored.
The airline’s capital expenditure is now expected to be at the lower end of the previously guided range of $4.3 billion to $4.6 billion.
In April, Qantas will take delivery of the first of a dozen Airbus A350-1000ULR aircraft, which it will fly from Sydney to London non-stop beginning in October.
Non-stop flights between Sydney and New York will start in 2028, with the airline predicting the “Project Sunrise” flights will earn it another $400 million a year when all the planes are flying by 2030/31.
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