Qantas to raise airfares, cut flights as fuel costs bite

As of November 6, 2026, Qantas announced plans to hike airfares and reduce domestic flight schedules by 4% in early 2027 due to escalating fuel prices caused by ongoing conflicts in Iran. This cut is double the initial 2% reduction forecasted earlier this year. Both Qantas and its budget airline unit Jetstar will be affected, with the company's projected fuel bill for the final six months of 2026 increasing to $3.75 billion from a previous estimate of $3.6 billion.

The airline emphasized that demand remains strong as customers prioritize travel despite rising costs. However, Qantas is expanding its international routes by 1% and expects total revenue per available seat kilometer (TRASK) to increase up to 10% in the first half of 2027, largely driven by international travel growth. To mitigate further risks, Qantas has extended hedging for approximately 85% of its annual fuel bill, anticipating ongoing high costs in the new financial year.

This strategic adjustment reflects Qantas's response to significant operational challenges posed by the Middle East conflict and global economic pressures, highlighting the airline industry’s vulnerability to geopolitical events.