Qantas Airways (ASX:QAN) says trading conditions remain broadly in line with its August FY25 outlook, but first-half domestic revenue growth is now expected at the lower end of guidance as fuel price volatility persists.
Group Domestic unit revenue is forecast to rise about 3% in 1H26, versus prior guidance of 3–5%. Leisure, SME and resources demand remain solid, while non-resource corporate demand is growing more slowly than previously expected. Jetstar domestic demand has stayed firm.
International guidance is unchanged, with Group International unit revenue still seen up 2–3% in 1H26 and demand steady across key markets. First-half capacity will be slightly lower than previously flagged due to timing on returning A380 aircraft to service. Qantas said it is monitoring the ongoing US government shutdown and working with partners to support customers, with no material demand impact to date.
Qantas Loyalty continues to perform strongly and remains on track for 10–12% growth in Underlying EBIT in 1H26, consistent with full-year FY26 guidance.
Fuel remains a headwind. The carrier said geopolitical tensions are keeping jet refining margins elevated and, at current prices, expects a 1H26 fuel bill of approximately A$2.62 billion, including hedging, carbon costs and transformation benefits. This incorporates about A$25 million in additional non-cash carbon costs tied to higher CORSIA compliance obligations.
Within the Jetstar Group, the wind-down of Jetstar Asia—which ceased operations on 31 July 2025—is on track, with a 1H26 Underlying EBIT loss of about A$30 million expected. A weaker Japanese yen against the US dollar has also negatively affected lease-liability adjustments on Jetstar Japan’s share of profit, producing an estimated A$20 millionnon-cash adverse impact so far in 1H26.
Qantas also issued updated capacity guidance based on current demand and fleet delivery assumptions.
In early trade, Qantas shares fell 3% to A$9.88. Ahead of the update, Citi equity analyst Samuel Seow said the rise in refining margins “appears better than feared,” adding that while the outlook implies modest revisions, “given the share price softness we think this update should provide some relief to investors.”