Qantas slashes domestic flights by five per cent as fuel crisis grips airline industry

Qantas has slashed its domestic flying capacity by 5 per cent in response to increasing fuel costs triggered by the war in the Middle East.

In a market update today, the airline said it is set to pay $3.1 billion to $3.3 billion for jet fuel over the second half of the financial year after refinery costs skyrocketed from $US20 a barrel to $US120 a barrel.

The hike in jet fuel is expected to deliver between a $500 million and $800 million hit to the airline's bottom line.

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Qantas Group says it is working closely with the government and jet fuel suppliers who remain confident about 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," the update said.

"The group has taken action to mitigate the impact of the conflict in the Middle East, including international network changes, capacity adjustments and fare increases."

Passengers on impacted Qantas and Jetstar domestic flights will be contacted about new flights.

Despite the brutal hit to the compay's cashflow, Qantas said it has seen a strong spike in demand for international travel to Europe as travellers book alternative routes.

The airline has redeployed capacity from domestic and US legs to service more flights to Paris and Rome.

Qantas subsidiary Jetstar has already slashed flights between Sydney and Auckland and Brisbane and Auckland by 12 per cent, around 55 flights, as jet fuel costs bite.

More to come.

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