Nov 6 (Reuters) – Australia’s Qantas Airways raised its first-half fuel cost forecast by 4% on Friday and said it expected prices to remain elevated for the rest of the financial year.
The country’s largest airline said it expected a fuel bill of A$3.75 billion ($2.61 billion) for the six months ending December 31, A$150 million higher than the forecast at its annual results in August.
Qantas said it had adjusted fares and capacity in response to higher fuel costs and would continue to do so. The carrier said it was about 85% hedged for the full financial year, predominantly in Brent crude oil.
Fuel hedging lets airlines fix or cap the price of future fuel purchases through derivatives, giving them more certainty on one of their biggest costs.
Qantas said it now expected its full-year capital spending to be at the lower end of the previously guided range of A$4.3 billion to A$4.6 billion. It added that demand remained resilient as customers continued to prioritise travel.
($1 = 1.4382 Australian dollars)
(Reporting by Shivangi Lahiri in Bengaluru; Editing by Shailesh Kuber and Jamie Freed)
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