Australia’s flag carrier Qantas warned that jet fuel expenses will surge as the Iran‑Israel conflict pushes refining margins higher. The airline now projects a near‑term fuel bill up to 32% above its earlier estimate, despite solid demand for Europe‑bound flights. Higher costs threaten profit margins for the country’s biggest airline, and could force route adjustments or fee hikes.

Qantas revised its six‑month fuel outlook to between A$3.10 billion and A$3.30 billion (about US$2.20‑2.34 billion), a sharp rise from the A$2.50 billion forecast issued less than two months ago. The jump reflects widening jet refining spreads, where the gap between crude oil and finished fuel has widened amid regional supply shocks, and constrained refinery capacity in the Middle East, driving up global costs.

The cost escalation arrives as Qantas balances robust European traffic against tightening operating margins. Investors will watch how the carrier manages hedging strategies and pricing power to offset the fuel surge, or pass them to customers through higher ticket prices. With airlines worldwide grappling with similar pressures, Qantas’ ability to contain expenses will directly influence its earnings outlook for the current fiscal year.