Qantas Airways (ASX:QAN) now expects fuel cost for the fiscal second half to be AU$3.1 billion to AU$3.3 billion, as February jet refining margins peaked at about $120 per barrel, according to a Tuesday Australian bourse filing.
The airline said it has hedged about 90% of its fiscal H2 crude oil exposure but remains largely exposed to movements in jet refining margins.
The company said it has reduced domestic capacity in the fiscal fourth quarter by about five percentage points, given continued fuel price volatility and global economic conditions, with affected Qantas and Jetstar customers being contacted directly and offered alternative flights or a refund.
Group international unit revenue growth for the fiscal H2 is now expected to be 4% to 6%, double the previous guidance. In comparison, group domestic unit revenue growth is expected to be about 5% for the second half and 6% for the fourth quarter, the filing added.
The group's fiscal year 2026 capital expenditure is now anticipated to be at or below AU$4.1 billion, at the bottom end of its previously guided range, while the planned AU$150 million on-market buyback has not commenced due to current uncertainty, the filing added.
The airline expects fiscal year 2026 capacity growth of 3% compared to the prior corresponding period, including a 3% rise in both domestic and international capacity.