Qantas and Jetstar cut flights over fuel costs
Sydney (1 May)
Qantas and Jetstar have cancelled Indian and trans-Tasman flights scheduled for July-September because of high jet fuel costs, Qantas Group – their parent company – said on 1 May.
The changes will cut Qantas Group’s international capacity by 2% points over the quarter, the company told investors.
Qantas will suspend its Sydney – Bengaluru route from August to October, but increase the capacity of its Sydney – Paris and Sydney – Rome routes over the same period because of high demand.
Qantas and Jetstar have also cancelled trans-Tasman flights scheduled over the next few months, Qantas Group said.
Qantas’ jet fuel costs more than doubled between late-February and mid-April, largely because of jet refining margins, the company said on 14 April. It expects jet fuel prices to hover between A$185/barrel and $200/barrel over January-July 2026, the company added.
Futures prices for Brent crude oil – which refiners use to produce jet fuel – reached $110.84/barrel (A$154.16/barrel) on 1 May, up from $72.87/barrel on 27 February. Crude oil prices spiked in early March because Iran closed the Strait of Hormuz in response to US-Israeli attacks.
The Australian Government has taken steps to strengthen refined oil supply chains since early March, though its measures will not impact jet fuel costs. It pledged to work with Malaysian, Singaporean, Bruneian, and South Korean authorities to maintain the flow of essential goods, including oil and gas, in April and May.
The Government has also underwritten diesel and jet fuel purchases since mid-April. “We have now secured more than 450 million litres of additional diesel and 100 million litres of additional jet fuel to keep Australia moving,” Prime Minister Anthony Albanese said today.
Australia had 30 days’ worth of jet fuel reserves on 21 April, according to the Department of Climate Change, Energy, the Environment, and Water.
Qantas Group’s changes come a day after Air New Zealand scrapped dozens of regional New Zealand flights because of jet fuel costs.
“[Air New Zealand’s cancellations] affect around 2% of passengers due to travel across [July],” an Air New Zealand spokesperson told Lithos. “We’ve targeted the [cancellations] to minimise disruption and to ensure that the vast majority of impacted customers can still travel on the same day,” they added.
Air New Zealand’s jet fuel prices increased from $85/barrel - $90/barrel in February to $150/barrel - $200/barrel in early March, the company told investors on 10 March.
By Avinash Govind