Qantas has said higher international airfares will only partially offset higher fuel costs.
The airline expects to pay between $3.1 billion and $3.3 billion (Australian dollars) for fuel in the six months to June 30, despite hedging its oil supplies, the Australian Financial Review reports.
The company cannot defend refinery costs, which have increased fivefold.
This will increase Qantas’s expected fuel bill for the second half of the year by $600 million to $800 million (about £400 million), but this will be partially offset by better than expected earnings from international flights.
The airline expects to double revenue per available seat kilometre, a key measure for airlines, from international flying, since Middle Eastern airlines were forced to reduce services amid the conflict, which has broadened to include the region. In response to the US-Israeli attacks, Iran has fiercely attacked its neighbors.
High fuel costs and increasing supply shortages have led Qantas to cut domestic and regional services. It is reported that this includes a 5 percent reduction in seat capacity in the coming weeks.
The airline will ground flights that are not full and rapidly consolidate services on busy routes in the capital city.
“The group is working closely with the government and jet fuel suppliers to continue to provide confidence in fuel supplies for the remainder of April and into May. We are monitoring the situation closely given the ongoing uncertainty across the global fuel supply chain,” Qantas said in a statement.
