In brief
Qantas announced it would keep trimming flight capacity and raising fares to cope with elevated fuel costs projected to reach about A$3.75 billion in the first half of FY27. The airline also said it has hedged roughly 85 % of its fuel exposure and still targets 8‑10 % revenue growth for both domestic and international operations. Competing reports echo the company's strategy but focus mainly on the financial and operational adjustments.
Qantas said on Friday it would continue adjusting passenger fares and cutting flight capacity as fuel costs climb, a move that is expected to persist throughout the 2027 financial year, according to an Xinhua report and a statement cited by Nine.com.au.
The Queensland‑based carrier projected that its total fuel spend for Qantas and its low‑cost unit Jetstar in the first half of FY27 would reach approximately A$3.75 billion, an increase from the A$3.6 billion forecast in August. This figure translates to roughly 2.6 billion U.S. dollars in the current exchange rate.
Under the announced strategy, the group plans to cut domestic capacity across Qantas and Jetstar in Q3 of FY27 by 4 percent relative to the same period a year earlier – double the 2 percent reduction originally expected in August. The company stated that it has and will continue to adjust fares and capacity in response to higher fuel costs, citing forward curves that indicate fuel prices are likely to remain elevated through FY27.
Qantas also highlighted that it has hedged approximately 85 % of its fuel exposure for FY27, predominately against Brent crude oil prices. The airline said that despite the higher costs, it expects total unit revenue across both domestic and international businesses to grow by 8 to 10 percent in the first half of FY27 compared with the corresponding period a year earlier, a guidance unchanged from August.
In a statement aligned with these metrics, Nine.com.au reiterated that the carrier “has and will continue to adjust fares and capacity in response to higher fuel costs” and expects fuel prices to remain high into 2027. While Nine’s brief report does not detail the projected fuel expenditure or the specific capacity cut percentage, it confirms the airline’s intent to manage the cost pressure through pricing and service adjustments.
The Xinhua source emphasized the dual impact of the fuel hike on pricing and flight levels, noting that Qantas will again weigh fuel costs and its hedging position when setting future fares. The airline’s hedging program, covering roughly 85 % of expected fuel needs, remains a cornerstone of its risk management approach.
Both outlets underscore the airline’s view that, despite the cost burden, demand for domestic travel remains steady enough to support the targeted revenue growth. Nonetheless, the company’s capacity reduction signals a cautious stance on load factors and operating economics.
While the Xinhua report provides detailed figures on projected costs and capacity cuts, Nine.com.au offers a high‑level confirmation of the policy direction, highlighting the airline’s concise stance on fare and capacity adjustments.
Overall, Qantas’ strategy to manage rising fuel costs involves a mix of modest fare increases, measured capacity reductions, and robust hedging, aimed at sustaining profitability while navigating ongoing fuel price volatility throughout FY27.
