Qantas Airways has a strong enough balance sheet to withstand a more than doubling in the price of jet fuel without losing its investment-grade credit rating, says Moody's.

In addition to its hedged position this financial year, the airline has already hedged 77 per cent of its fuel requirement for the 2016-17 financial year. Given the spot price of jet fuel is $US47.75 a barrel, that means there is little chance of its average jet fuel purchase price rising any time soon to the $US105-a-barrel scenario tested by the ratings agency.

The Moody's scenario doesn't take into account the airline's fuel hedging strategy nor its ability to cut shareholder distributions, reduce capital spending or even raise equity if needed to protected its newly regained investment-grade rating.

Qantas on Wednesday began the first on-market share purchases as part of the $500 million buyback program announced alongside its record first-half results in February by buying $6.1 million of shares at an average price of $3.85.