Qantas warns of continued elevated fuel costs as it diverts capacity to international routes

Qantas says demand for travel remains strong despite ongoing cost-of-living pressures but warns it will keep adjusting fares as oil and fuel prices keep climbing.

The national carrier on Friday said it expected fuel prices to remain elevated through the end of the financial year, and was expecting its six-monthly fuel cost to be about $3.75 billion.

“The group has and will continue to adjust fares and capacity in response to higher fuel costs,” Qantas said in a statement ahead of its annual general meeting to be held later on Friday.

Capacity across its group network its expected to marginally slow across the course of the year to June 30, 2027 — up one per cent in the first quarter but flat in the second quarter, and down one per cent in the third quarter.

Largely this overall forecast is being pulled from domestic capacity at Qantas and Jetstar, where capacity is forecast in the first half to be 3 per cent lower, while Qantas international capacity is expected to be 2 per cent higher. In August, Qantas forecast a 2 per cent domestic cut.

Qantas on Friday reiterated its international routes were being favoured as travellers sought to avoid Middle Eastern routes and carriers.

“Demand remains resilient as customers continue to prioritise travel. International demand across Qantas and Jetstar remains strong, supported by customers redirecting travel away from the Middle East,” the airline said.

“Domestic leisure demand remains strong. Non-resources corporate and government travel remains stable and is being closely monitored.”

Capital expenditure for the financial year is now expected to be at the airline’s lower end of a previously guided $4.3-$4.6b.

DOWNLOAD THE NIGHTLY APP