Qantas and Jetstar travellers can expect higher airfares and fewer domestic flights over the coming months, Qantas Group said in an update on its 2026 financial year (FY26) outlook.
As jet fuel costs more than double and remain “highly volatile” due to the ongoing US-Iran conflict, the group has confirmed it will cut some domestic services and increase prices.
For travellers, the most immediate impact is a reduction in domestic capacity. Qantas Group will trim flights by around five per cent in the final quarter of the financial year. Affected customers will be contacted and offered alternative flights or refunds.
At the same time, fares are rising. The airline says higher operating costs are flowing through to ticket pricing, particularly as fuel becomes more expensive to refine and supply globally.
More Europe
Internationally, the picture is more mixed. Demand for Europe remains “strong”, with Qantas shifting aircraft away from the US and domestic routes to boost services to Paris and Rome. This reflects changing travel patterns, with many passengers avoiding routes impacted by Middle East disruptions.
The airline says it may adjust its network further if conditions change.
While Qantas Group does not fly directly to the Middle East, it says it is supporting customers booked on partner airlines. According to the group, travellers can now access more flexible options, including changing flights or requesting refunds where needed.
But fuel remains the key pressure point. Despite hedging most of its exposure, Qantas is still facing significantly higher costs, with its fuel bill expected to reach up to $3.3 billion for the second half.
The flying kangaroo’s update comes as Persian Gulf carriers like Qatar Airways and Etihad try to stimulate demand for flights – especially to Europe – with cheaper airfares. Read more about that here.
KARRYON UNPACKS: Higher fuel costs are hitting where it matters. Expect tighter domestic capacity and rising fares, but also smarter network shifts. For travel advisors, flexibility and forward planning are quickly becoming your strongest selling tools.
