Shares of Qantas Airways (ASX:QAN) plummeted 5.01% in intraday trading, as Australia's flag carrier trimmed its domestic revenue outlook and flagged higher fuel costs for the first half of fiscal 2026. The stock hit a five-month low, underperforming the broader Australian market, which remained relatively flat.

Qantas revised its first-half 2026 domestic unit revenue growth forecast to approximately 3%, down from the previous guidance range of 3% to 5%. The airline cited softer demand from non-resource corporate clients as a key factor, although travel demand from the mining and resources sector remained robust. Additionally, the company now expects fuel costs for the half to reach A$2.62 billion ($1.70 billion), up from the earlier projection of A$2.6 billion, reflecting elevated jet refining margins due to ongoing geopolitical volatility.

CEO Vanessa Hudson announced plans to adjust domestic capacity in the second half to match the observed demand profile. The carrier also reported that group capacity for the first half of 2026 would be "slightly lower than previously guided" due to delays in returning its A380 fleet to service. Despite these challenges, Qantas maintained its international unit revenue guidance at 2-3% growth for the half, and its Loyalty program remains on track to achieve 10-12% underlying EBIT growth. The company continues to monitor the ongoing U.S. government shutdown but has not observed any material impact thus far.