Qantas expects fuel costs to drop to $2.55B in 1H FY25, but keeps an eye on geopolitical situation

Qantas Airlines Ltd (ASX:QAN) expects its fuel prices in the first half of the 2025 fiscal year to be $2.55 billion; a fall from $2.7 billion in the previous half-year, though geopolitical tensions will continue to influence the situation.

The figure of $2.55B is inclusive of hedging and gross carbon costs.

In its market update for October, Qantas told investors demand for both its main carrier and also Jetstar remained solid, and that the latter was going beyond previous expectations based on ‘stronger than expected travel demand.’ Demand for corporate travel continued strong, affecting Qantas Domestic’s business.

In terms of RASK (revenue per available seat kilometre), this was expected to increase three to 5% in the first half of the 2025 fiscal year compared to the previous corresponding period for Qantas as a whole, though the RASK figure for international travel was still predicted to decrease between seven to 10%.

Earnings (underlying EBIT) for the Qantas Loyalty business were expected to show at least 10% growth throughout the whole FY25; the company noted the launch of Classic Plus Flight Rewards.

However, fair value changes from the launch would likely result in lower earnings in the first half of the year relative to the prior year.

Qantas also announced it had provided 27,000 employees with ‘thank-you’ payments for their contribution to the company, with this being recognised in a total $28 million cost during H1 FY25.

Qantas shares moved up one the news, and at 12:42 AEDT, they were trading at $8.01 – a rise of 1.26% since the market opened.

Join the discussion: See what HotCopper users are saying about Qantas and be part of the conversations that move the markets.

The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.