Qantas shares extend losses as fuel costs reshape operations

The Qantas Airways Ltd (ASX: QAN) share price is in the red on Thursday, falling 2.30% to $8.50.

The drop adds to a difficult stretch for the airline, with shares now down around 20% over the past month. Rising fuel costs linked to the Middle East conflict have been a key driver behind the decline.

Today’s move comes alongside fresh reporting that highlights how Qantas is adjusting its operations to manage those cost pressures.

Fleet changes point to cost focus

According to The Australian, Qantas has been replacing hundreds of flights with smaller aircraft to reduce fuel use.

The changes involve using fewer large Airbus A330 aircraft, particularly on domestic routes, while smaller, more fuel efficient Boeing 737 jets handle more flights.

On key routes such as Melbourne to Perth, the use of A330’s has dropped, while overall widebody flying has also declined.

This reflects a broader push to better match capacity with demand. It also helps limit fuel use, which remains one of the airline’s largest operating costs.

Fuel pressure reshaping decisions

Fuel costs have become a central issue for airlines in recent weeks.

Tensions in the Middle East have pushed oil prices higher, lifting costs across the aviation sector. There have been no confirmed supply disruptions, but prices have risen due to increased risk.

In response, airlines are focusing on efficiency measures rather than passing on higher costs to consumers.

The report highlights that newer aircraft are being prioritised due to better fuel efficiency, while older and larger planes are being used less frequently.

There are also operational adjustments taking place behind the scenes at Qantas. These include reducing excess fuel loads, optimising flight planning, and limiting ground delays where possible to avoid unnecessary fuel burn.

Limited impact on profit outlook

Despite these changes, the financial impact may be manageable.

Analysis referenced in the report suggests the effect on Qantas’ 2026 profitability could be in the range of around 10% to 15%, assuming current conditions persist.

At the same time, capacity adjustments and potential fare increases may help ease part of the pressure. Higher revenue per seat kilometre has already been flagged as one way the airline can help manage the impact.

Foolish takeaway

The recent share price decline reflects a mix of rising costs and uncertainty around how long those pressures will last.

Qantas is responding by adjusting capacity, improving efficiency, and shifting its fleet mix. These steps may help manage costs, but the business remains exposed to movements in fuel prices.

The past month highlights how sensitive earnings are to changes in input costs, even as management works to limit the impact.

The post Qantas shares extend losses as fuel costs reshape operations appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.