Qantas to raise fares and cut 4% of domestic flights in early 2027 as fuel costs soar

Qantas will raise ticket prices and trim 4% of its domestic flights in the first three months of 2027 to cope with higher fuel costs. The cut is twice the 2% reduction the airline predicted in August. Both its low‑cost arm Jetstar and the premium Qantas brand are scaling back schedules. The carrier now expects its fuel bill for the last six months of 2026 to reach $3.75 billion, up from an earlier forecast of $3.6 billion. The rise reflects the lingering impact of the war in Iran, which has kept energy prices high worldwide. Higher fares come as Australians face rising cost‑of‑living pressure from climbing interest rates. "The group has and will continue to adjust fares and capacity in response to higher fuel costs," Qantas said in a statement. It added that demand stays resilient as travellers keep prioritising journeys.

Context

Fuel typically accounts for a large share of an airline’s operating costs, so any sustained jump in oil prices forces carriers to rethink pricing and capacity. Conflicts that disrupt oil supplies, such as the war in Iran, often push global energy prices upward, affecting travel costs for passengers.