Qantas is pushing up airfares and making deeper cuts to scheduled flights in Australia to offset months of higher fuel costs.
A sustained increase in fuel prices means Qantas needs to “rebalance capacity and fares,” the airline said on Thursday.
Domestic services in July and August will fall to 103% of pre-Covid levels from 107%.
Qantas had already cut flying in Australia next quarter to 110% of pre-pandemic volumes from a planned 115%.
Russia’s invasion of Ukraine has sent oil prices soaring, with crude above US$100 a barrel for the majority of the time since early March.
Qantas had warned it might have to raise fares if higher fuel costs persisted, however, the airline didn’t elaborate on airfare changes.
Cutting flights means Qantas can fill more of the seats on its remaining services, driving up revenue on those routes without buying much additional fuel.
Every $4 jump in the oil price adds 1% to airfares, Qantas has said.
Earlier in the week, Qantas announced it had bought a majority stake in Byron Bay-based online travel business TripADeal, with plans to “significantly grow the company’s revenue through a close partnership with Qantas Loyalty.”
The airline said the stake will allow Qantas Loyalty to immediately expand its exposure to the estimated $13 billion online packaged holiday booking market, which is experiencing significant growth as leisure demand booms and the shift to e-commerce continues.
Via Bloomberg.