Rising fuel costs continue to show up in airfares, with Virgin Australia confirming price rises and slight schedule changes for the months ahead.
In an FY26 update on the ASX, the airline says it will trim domestic capacity by around one per cent in the final quarter of the 2026 financial year, while adjusting fares across the second half to offset surging fuel prices.
Jet fuel costs have more than doubled since February and are expected to add around $30-40 million to costs in H2 FY26.
For travellers, that likely means higher fares and slightly fewer seats on some routes.
However, the impact is expected to be modest compared to rival Qantas, which yesterday flagged deeper capacity cuts of up to five per cent over the same period.
Virgin Australia says demand for travel remains strong, helping it absorb some of the cost pressure. The airline has also leaned on fuel hedging and network tweaks to limit disruption to its schedule.
There is one notable exception, however. Virgin’s Doha services, operated via a wet lease with Qatar Airways, remain paused until at least mid-June, following earlier disruptions.
Elsewhere, the airline is maintaining most of its domestic flying program, with overall capacity still expected to rise slightly across the second half of the year.
With fuel prices still unpredictable, further adjustments can’t be ruled out.
“Given ongoing volatility, FY27 settings including capacity are under review,” the carrier stated.
“The group continues to monitor the external environment and retains flexibility to take further actions if required.”
Virgin said its overall financial outlook remains unchanged despite the volatility.
In February, Virgin Australia delivered a strong first-half report for FY26, with underlying net profit after tax rising 20.7 per cent to $279 million. Underlying earnings before interest and tax (EBIT) increased 11.7 per cent to $490 million, while revenue also climbed nearly 10 per cent (9.3%) compared to the first half of FY25.
Last week, the carrier Virgin Australia launched a new tool that brings multiple fare types into one view. The airline says the feature is an Australian-first and aims to simplify booking decisions.
KARRYON UNPACKS: Fares are climbing, but capacity cuts are measured… for now. For travel advisors, it’s about managing expectations early, locking in value and navigating a market where pricing is shifting faster than schedules.
