• Fuel costs have more than doubled due to increased jet refining margins
• Qantas has taken actions to mitigate impact, including network changes, capacity adjustments, and fare increases
• Group International and Domestic RASK growth revised upwards

Qantas Airways Limited has provided a market update on its FY26 outlook, citing the impact of the conflict in the Middle East on jet fuel prices. Since the Group's 1H26 financial results, jet fuel prices have more than doubled and remain highly volatile, with jet refining margins increasing from US$20 per barrel in February to around US$120. As a result, the estimated fuel cost for 2H26 is now $3.1 - $3.3 billion. The Group has taken action to mitigate the impact, including international network changes, capacity adjustments, and fare increases. While the Group does not operate to the Middle East, it has provided additional support to customers booked to travel on partner airlines. Qantas continues to see strong demand for international travel to Europe, leading the Group to redeploy capacity from the US and its domestic network to increase flights to Paris and Rome. Due to the continued volatility in fuel prices and global economic conditions, the Group has reduced domestic capacity in 4Q26 by around 5 percentage points. The revised RASK outlook assumes current demand levels are sustained across Domestic and International, with Group International unit revenue (RASK) growth for 2H26 expected to be 4 to 6 per cent, and Group Domestic unit revenue (RASK) growth for 2H26 expected to be approximately 5 per cent, and 6 per cent for 4Q26. The Group maintains a strong financial position and is well progressed with its FY27 funding plans, with FY26 capital expenditure now at or below $4.1 billion.

The Group's FY26 capital expenditure will now be at or below $4.1 billion, the bottom end of the previously guided range.

The Group will provide an update on the FY27 outlook at a later date, given the ongoing volatility.