Qantas will cut domestic flights and adjust its network as soaring fuel costs and uncertainty linked to the Middle East conflict place increasing pressure on operations, with the airline flagging up to $800 million in additional fuel expenses.
The airline said it had already increased fares, reduced domestic capacity by around five percentage points in the fourth quarter, and redeployed aircraft to more in-demand international routes. Customers affected by the changes are being contacted and offered alternative flights or refunds.
Qantas has sharply revised its fuel cost forecast for the second half of the financial year to between $3.1 billion and $3.3 billion, up from an earlier estimate of $2.5 billion, noting that “jet fuel prices have more than doubled and remain highly volatile”.
Despite the disruption, the airline said demand for European travel remains strong, prompting an increase in flights to Paris and Rome, with capacity shifted from US and domestic routes.
Regional services are also affected, with Qantas confirming it will cancel all flights to and from Mount Gambier from next month, citing both rising fuel costs and declining demand.
While the group has hedged around 90 per cent of its crude oil exposure, it remains vulnerable to sharp increases in jet refining margins, which have surged significantly in recent months.
Qantas said it continues to monitor fuel supply closely and is working with government and suppliers, who “continue to provide confidence in fuel supply for the remainder of April and well into May”.
Source: ABC News
