Virgin Australia announced on Wednesday that it expects fuel costs to rise by A$30 million to A$40 million (approximately $21.38 million to $28.51 million) in the second half of fiscal 2026, largely due to price volatility stemming from the ongoing conflict in the Middle East. The airline noted that jet fuel prices have more than doubled since the end of February 2026, significantly impacting its fuel costs for the June 2026 quarter. Despite these challenges, Virgin Australia maintains its overall financial outlook for the year, projecting an increase in underlying earnings before interest and taxes (EBIT) and EBIT margins compared to the previous year. Revenue per available seat kilometre (RASK), a key indicator of pricing power, is now expected to grow by 5% in the second half, surpassing earlier forecasts of 3%-4%. The airline also anticipates a 1% increase in total domestic capacity for the second half, followed by a 1% reduction in the fourth quarter. Virgin Australia has hedged 92% of its Brent crude oil and 71% of its refining margins for the remainder of fiscal 2026, minimizing exposure to fuel price volatility.