Qantas to raise prices and cut flights as airline projects fuel costs to hit nearly $4 billion
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Qantas has flagged plans to raise prices and slash flights across Australia as the airline battles soaring fuel costs.
The airline announced on Friday it would cut Qantas and Jetstar domestic flights by up to five per cent by the second quarter of 2027, citing the toll of rising oil prices on its balance sheet.
Qantas will raise airfares and reduce its domestic capacity as the cost of fuel bites. Paul Rovere
Qantas projects its fuel bill will reach an estimated $3.75 billion for the second half of 2026, which is $150 million more than the initial forecast for the period.
In a statement, Qantas said it “has and will continue to adjust fares and capacity in response to higher fuel costs” and expects fuel prices to remain high in 2027.
“Demand remains resilient as customers continue to prioritise travel,” Qantas said.
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“International demand across Qantas and Jetstar remains strong, supported by customers redirecting travel away from the Middle East.
“Domestic leisure demand remains strong. Non-resources corporate and government travel remains stable and is being closely monitored.”
Though domestic flights will be reduced, the airline is expanding its international network of flights on its premium brand Qantas by one per cent in the third quarter of 2027.
Though domestic fares will be reduced, the airline is expanding its international network of flights on its premium brand Qantas. Australian Financial Review.
It also posted a positive projection for its loyalty brand Qantas Frequent Flyer, with underlying EBIT growth of 5 per cent to 7 per cent forecast for FY27.
Qantas said it had hedged 85 per cent of its fuel for the 2027 financial year.
The group’s net capital expenditure for the same fiscal period is expected to be at the lower end of its previous forecast of $4.3 billion to $4.6 billion.
The fluctuating price of fuel triggered by the ongoing conflict in Iran has put pressure on Australia’s airline industry.
Qantas also slashed its domestic flying capacity by 5 per cent in April for the three months to June 2026.
The carrier said it expected to pay between $3.1 billion to $3.3 billion for jet fuel over the second half of the 2025/26 financial year.
Brent crude oil is currently trading about $US99.18 to $US99.52 per barrel following a sharp drop in response to the midterms result in the US.
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