(Corrects prior fuel cost forecast in paragraph 2 to A$2.5 billion, not A$2.2 billion, and corrects to say half of fourth-quarter international sales were ‌locked in before the crisis, not total sales, in paragraph 6)

April 14 (Reuters) - ‌Australia's Qantas Airways said on Tuesday it has raised its fuel cost outlook and has not started its ​planned share buyback, citing sharply higher and volatile jet fuel prices after the war in the Middle East cut oil supply.

The airline said jet fuel prices have more than doubled, lifting its estimated fuel bill for the second half of fiscal 2026 to between A$3.1 billion ‌and A$3.3 billion ($2.20 billion to $2.34 ⁠billion), up from its prior forecast of A$2.5 billion.

The surge underscores how quickly geopolitical shocks are feeding through to airline cost bases, with ⁠jet fuel prices soaring as refineries have been forced to cut output due to the loss of crude oil supply from the Middle East.

While Qantas has hedged nL8N3ZY1RV much of its ​crude ​exposure, it remains significantly exposed to the spike ​in jet fuel spreads, it said.

To ‌offset rising costs, Qantas is lifting fares and shifting flights toward stronger routes such as Europe, where demand nL4N4070S8 remains firm, while cutting domestic capacity by about 5 percentage points in the June quarter.

The airline said revenue per available seat kilometre (RASK), a key measure of pricing power, is expected to grow between 4% and 6% for international operations and ‌about 5% domestically in the half year to ​June, reflecting higher fares, but said about half of ​fourth-quarter international sales were locked ​in before the crisis.

"Qantas continues to see strong demand for international travel ‌to Europe as customers seek alternative routes. ​In response, the ​Group has redeployed capacity from the U.S. and its domestic network to increase flights to Paris and Rome," it said.

Even so, the scale and speed of the ​fuel shock has prompted a ‌more cautious capital stance, with management opting to hold off on a ​previously flagged A$150 million buyback.

($1 = 1.4085 Australian dollars)

(Reporting by Roushni Nair in Bengaluru; ​Editing by Christian Schmollinger and Sonali Paul)

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