Overview
Since the Middle East conflict sent global oil prices into chaos, fuelling up at the petrol pump has caused plenty of pain. Now, travellers can expect plane tickets to rise, too, with Qantas today announcing it is increasing fares and adjusting capacity to mitigate its significantly higher-than-expected fuel costs.
According to the latest Qantas Group Market Update, the airline previously estimated fuel costs to reach $2.5 billion in the second half of the financial year. However, with considerable uncertainty around supply for the foreseeable future, this estimate has risen by about $800 million to $3.3 billion.
At the same time, Qantas and its low-cost subsidiary Jetstar will reduce domestic capacity by about five percent for the fourth quarter of 2026. With fuel price volatility and global economic conditions behind the capacity cut, Qantas Group says it "retains optionality to take further actions to mitigate fuel cost increases over time."
"The Group is working closely with the Government and jet fuel suppliers who continue to provide confidence in fuel supply for the remainder of April and well into May. We are closely monitoring the situation given the ongoing uncertainty in global fuel supply chains," says the market report.
Signifying this downturn in domestic capacity, Qantas has already cancelled its services to and from Mount Gambier, in regional South Australia. With flights between Mount Gambier and Adelaide halted from Monday, May 18, Qantas said the flights were no longer viable, with some operating at less than 20 percent capacity.
Meanwhile, the airline says it's offering additional support to customers navigating network changes across the Middle East, including more flexibility to move flights or receive a refund. "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 US and its domestic network to increase flights to Paris and Rome."
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