Airline Virgin Australia will reduce domestic flying as rising jet fuel prices continue to squeeze the aviation sector, becoming the latest carrier to respond to sharp cost increases driven by global oil market disruption.
The airline told the ASX it will cut domestic capacity by about 1 per cent in the three months to June 30, while expecting fuel costs to rise by $30–40 million in the second half of the financial year.
It follows a similar move by Qantas, which warned of up to $800 million in additional fuel costs and has already suspended four regional routes and permanently cancelled one domestic service.
Virgin said jet fuel prices had become “extremely volatile and more than doubled since the end of February 2026”, driven by global oil shocks linked to conflict in the Middle East.
The airline also noted supplier assurances that fuel supply remains stable “well into May 2026”.
Despite short-term reductions, Virgin said it still expects domestic capacity to be 1 per cent higher across the second half of the financial year overall.
The company said it would increase fuel hedging to manage volatility, alongside potential fare and capacity adjustments if needed.
Source: ABC.
