Qantas Cuts U.S. and Domestic Flying as Fuel Crisis Forces European Pivot

Qantas warned Tuesday that soaring jet fuel costs linked to the Middle East conflict will blow a hole of up to A$800 million ($569 million) in its fuel bill, forcing the airline to cut flying in some markets and redeploy aircraft to stronger routes.

The carrier is trimming U.S. and domestic capacity while boosting European services, chasing higher yields as global travel patterns continue to change.

The headaches for Qantas stem from jet fuel prices that have more than doubled since the Iran war started on February 28. The company has covered roughly 90% of its crude oil exposure, but the full numbers reflect a problem that hedging can’t fully solve. 

The Australian flag carrier has almost no protection against the cost of refining that crude into usable jet fuel. Qantas said those refining margins have jumped from around $20 per barr