Qantas Slashes Domestic Flights And Hikes Fares As Middle East Conflict Drives Fuel Costs To $3.3b |
SYDNEY — Qantas Airways Ltd. has cut domestic flight capacity by about 5% for May and June and raised fares as surging jet fuel prices linked to the escalating conflict in the Middle East threaten to add as much as $800 million to its second-half fuel bill.
The national carrier said Tuesday its expected fuel costs for the second half of the 2026 financial year would now reach between $3.1 billion and $3.3 billion, sharply higher than previous forecasts around $2.2 billion to $2.5 billion. Jet fuel prices have more than doubled since late February amid disruptions from U.S.-Israeli actions against Iran and related supply uncertainties.
Qantas and its budget subsidiary Jetstar have reduced domestic seat capacity by around five percentage points in the June quarter, with most cuts targeting off-peak services on routes between major capital cities. Some regional routes have also been affected, including suspensions or reductions on services such as Darwin-Gold Coast, Sydney-Busselton and Adelaide-Mount Gambier. Affected passengers are being contacted and offered alternative flights or refunds.
The airline has simultaneously redeployed aircraft from domestic and some U.S. routes to capitalize on surging demand for European travel, as passengers avoid carriers transiting through the troubled Middle East. Routes to cities such as Paris and Rome have seen strong interest, prompting Qantas to shift capacity toward higher-yield international services.
CEO Vanessa Hudson and executives described the moves as necessary to mitigate the impact of volatile fuel markets and broader economic uncertainty. "Given the continued volatility in fuel prices and the global economic conditions, we have........