Qantas hikes fares, deepens cuts to flying as fuel costs bite

The Iran war has caused energy prices to soar globally, prompting Qantas Airways to increase airfares and cut domestic flight schedules, according to a statement released on Friday. The airline will reduce its flying in Australia by 4% in the first quarter of 2027, which is double the 2% reduction it had previously forecasted in August.

Both Qantas and its low-cost subsidiary, Jetstar, are scaling back their flight schedules. The company now expects its fuel bill for the last six months of 2026 to be A$3.75 billion (US$2.6 billion), up from an earlier forecast of A$3.6 billion. This increase reflects the long-term effects of the Iran war, which has led to a significant rise in energy prices worldwide.

Higher fares in Australia, where distances between cities are vast and flying is largely necessary, will exacerbate the growing cost-of-living pressures caused by rising interest rates. Qantas stated that it will continue to adjust fares and capacity in response to the higher fuel costs. Despite the higher prices, demand for travel remains resilient as customers prioritize their trips.