In brief
Qantas said it would keep tweaking fares and trimming capacity as fuel costs climb, with projected first‑half fuel expenses of about A$3.75 billion—up from A$3.6 billion in August. The carrier will reduce domestic capacity by 4 % in the third quarter of FY27 and has hedged roughly 85 % of its fuel exposure. Qantas also expects unit revenue to grow 8‑10 % year‑on‑year.
In Sydney, Qantas announced that it would continue to tweak fares and cut domestic flight capacity in response to the surge in fuel prices that it expects to persist through the 2027 financial year.
Qantas said the airline’s total fuel costs for the carrier and its low‑cost arm Jetstar in the first half of FY27 are now projected to reach approximately A$3.75 billion, a rise from the A$3.6 billion forecast in August. The company said the increase reflects higher Brent crude oil prices that have pushed fuel bills for airlines worldwide.
For the third quarter of FY27, Qantas will reduce domestic capacity across Qantas and Jetstar by 4 percent compared with the same period a year earlier – a change that doubles the 2 percent cut it had previously forecast in August.
"Based on forward curves, fuel prices are expected to remain elevated through FY27," Qantas said in a statement. "The Group has and will continue to adjust fares and capacity in response to higher fuel costs."
Qantas said it has hedged about 85 percent of its fuel exposure for the year primarily against Brent crude oil prices, hoping to mitigate the volatility that has driven up operating costs.
The carrier also maintained its outlook for unit revenue, expecting growth of 8‑10 percent in both its domestic and international businesses in the first half of FY27 compared with the previous year. Qantas said this guidance remains unchanged from the August forecast.
These adjustments come as fuel prices remain tough for global airlines, with Qantas citing a need to match operating costs while balancing service commitments for its Australian travellers.
Industry analysts note that the 4 percent capacity reduction will affect thousands of seats on high‑traffic routes, potentially impacting travelers’ choices on cost and convenience.
Qantas’ strategy to lock in fuel prices and modestly raise fares is seen as a typical response among major carriers facing a prolonged period of elevated fuel costs across the Asia‑Pacific region.
Passengers who have been flying with Qantas and Jetstar will likely see these changes reflected in fares and flight schedules in the coming weeks as the airline implements the adjustments.
