Qantas has raised its fuel cost forecast for the second half of fiscal 2026 as escalating conflict in the Middle East continues to disrupt global oil markets. The airline now expects fuel expenses to rise significantly, with estimates reaching between A$3.1 billion and A$3.3 billion, up sharply from earlier projections.
The increase follows a surge in oil prices triggered by supply disruptions linked to the ongoing war involving Iran. Key shipping routes such as the Strait of Hormuz have been affected, constraining the flow of crude oil and refined fuels. This has contributed to a sharp rise in jet fuel prices, which have more than doubled since the conflict intensified.
As a result, Qantas and other global airlines are facing mounting financial pressure. The carrier has already indicated it may reduce flight capacity, increase ticket prices, and delay financial initiatives such as share buybacks to manage costs.
The broader aviation sector is also responding to the crisis, with some airlines considering route reductions, capacity cuts, and operational adjustments. Analysts suggest prolonged volatility in oil markets could lead to structural changes in the industry, including consolidation among carriers.
The situation highlights the aviation industry’s vulnerability to geopolitical events, particularly those affecting energy supply chains, and underscores the ongoing uncertainty facing global travel markets.
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