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Qantas lowers its first-half forecast for domestic revenue, citing weaker travel demand

Qantas Airways, Australia's national airline, cut its forecast of domestic unit revenue for the first six months of 2026, and noted a slight increase in fuel prices. The airline cited a softening corporate travel market, higher refining margins, and increased carbon compliance fees.

Qantas now expects an increase in domestic unit revenue of approximately 3% for the first six months, down from its previous forecast range of between 3% and 5%.

The flag carrier of Australia said that travel demand in the mining and resource sector was still strong, but corporate travel grew at a slower rate than expected.

The company has flagged that the group capacity for the first six months of 2026 will be "slightly less than previously guided" due to the delays in the return of the A380 fleet to service.

In a separate press release, CEO Vanessa Hudson stated that "we are adjusting our domestic capacity to match the profile of demand we are currently seeing."

Qantas has said that it is closely monitoring the ongoing U.S. Government shutdown and working with its partners to support any affected customers. However, no material impact on the demand for Qantas products or services has yet been observed.

Fuel costs are forecast to be A$2.62 ($1.70) billion for the first half, up from A$2.6 billion in previous outlooks. This is due to higher jet refining margins as a result of ongoing geopolitical instability.

The revised figure includes A$25m in non-cash carbon cost increases tied to increased compliance obligations under CORSIA. ($1 = 1.5389 Australian dollars) (Reporting by Roushni Nair in Bengaluru; Editing by Alan Barona)

(source: Reuters)