Travellers can expect higher ticket prices for flights in the months ahead with Australia’s two largest airlines announcing airfare increases.
Qantas and Virgin Australia say soaring global fuel prices have placed significant pressure on operating costs.
The price hikes come amid a sharp escalation in jet fuel costs, driven largely by ongoing instability in the Middle East, which has disrupted global oil supply chains.
It is estimated some 30,000 flights have been cancelled since February 28 with fuel prices more than doubling since that time, forcing airlines to reassess fares, capacity and route networks.
Qantas said it expects its fuel bill for the second half of the 2026 financial year to surge to between $3.1 billion and $3.3 billion – up as much as $800 million on earlier forecasts.
In response, the airline has already begun raising fares and cutting domestic flight capacity by around five per cent in an effort to offset the rising costs.
The national carrier indicated that further fare increases could be implemented if fuel prices remain elevated, with executives pointing to continued volatility in oil markets and refining costs.
Analysts say the move is aimed at protecting profit margins while maintaining service levels on key routes.
Virgin Australia has followed suit, confirming it will also increase airfares and make modest reductions to its network.
The airline expects fuel costs to exceed previous estimates by $30 million to $40 million, with jet fuel now accounting for a significant share of its overall expenses.
While Virgin’s capacity cuts are smaller – around one per cent in the June quarter – the airline said pricing adjustments are necessary to absorb the financial impact.
Fuel currently represents about 21 per cent of its operating costs, underscoring the scale of the challenge facing carriers.
Both airlines have pointed to fuel hedging strategies as a partial buffer against the spike, though neither has been fully insulated from the rapid rise in costs.
Industry experts warn that if geopolitical tensions persist, airfare increases could become more widespread and sustained.
Despite the higher prices, demand for travel remains relatively strong, particularly on international routes, suggesting airlines may be able to pass on at least some of the additional costs to consumers without significantly dampening bookings.
The developments highlight the aviation sector’s vulnerability to global energy shocks, with travellers now likely to bear the brunt of ongoing uncertainty in fuel markets.
