Qantas Cuts Domestic Capacity as Jet Fuel Prices Surge to $120 Per Barrel

Key Facts

1Qantas reduced domestic capacity by 5% for Q4 2026 as jet fuel prices more than doubled.

2Jet fuel prices surged from $20 per barrel in February to as high as $120 due to the Iran War.

3The group expects its fuel bill to reach $3.1B - $3.3B despite having 90% of crude oil contracts at fixed prices.

Qantas Airways has announced a 5% reduction in domestic flight capacity for the fourth quarter of 2026, citing a massive surge in energy costs. Jet fuel prices have skyrocketed from $20 per barrel in February to as high as $120 following geopolitical instability linked to the Iran War. Despite having 90% of its crude oil contracts hedged at fixed prices, the group expects its total fuel bill to reach between $3.1 billion and $3.3 billion. In response to these pressures, the airline is also shifting resources from US routes toward European destinations to optimize operations. This move highlights the severe inflationary impact of the current energy crisis on the global aviation sector. Investors are closely monitoring the implications for QAN.AX shares and the Australian Dollar amid these capacity adjustments.