Qantas Shifts from US Routes to Europe as Fuel Costs Bite

Qantas said that it will cut some flights in the US and the domestic Australian market after a sharp rise in jet fuel costs increased pressure on its business.

At the same time, the airline will add more flights to Europe, where it currently sees stronger demand and better revenue opportunities.

Fuel costs rose faster than hedging could protect

Qantas said the recent Middle East conflict pushed jet fuel costs sharply higher. The airline now expects its fuel bill for the second half of fiscal 2026 to reach A$3.1 billion to A$3.3 billion (US$2.20 billion to US$2.34 billion).

The company had already hedged around 90 percent of its crude oil exposure, but that did not fully protect it. The main problem came from refining margins, which is the extra cost of turning crude oil into jet fuel. Qantas said those margins rose from around US$20 per barrel in February to about US$120 at their peak.

Qantas is moving aircraft to markets that look stronger

To manage that pressure, Qantas said it will reduce domestic capacity in the fourth quarter of fiscal 2026 by around 5 percentage points. It is also trimming some US flying and shifting that capacity into Europe.

The airline said it will add more service to Paris and Rome, where it sees stronger demand and better pricing.

Europe is benefiting as Qantas adapts to a volatile market

Europe now appears to be one of the airline’s clearest priorities. Qantas said international unit revenue growth in the second half is now expected at 4 to 6 percent, while domestic unit revenue growth is expected at around 5 percent.

The airline also said demand for Europe-bound travel remains strong, especially as travelers look for alternatives while the Middle East conflict continues to disrupt normal flying patterns. Some Qantas Europe services have already been adjusted, including rerouting through Singapore.

Airlines are responding to the fuel shock with different moves

Carriers react to the same fuel shock in different ways. More recently, Delta Air Lines, Southwest Airlines, and American Airlines raised checked baggage fees in April as higher jet fuel costs added pressure to airline pricing. Earlier, SAS cut around 1,000 April flights after jet fuel prices surged, while other airlines have raised fares or trimmed weaker parts of their network. That broader pattern suggests Qantas is not making an isolated adjustment, but responding to the same cost pressure that is reshaping airline capacity and pricing across global markets.

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