Qantas flags fare rises despite strong demand, with 4% fewer domestic flights planned for 2027

Strong demand for air travel has not stopped Qantas from raising fares and trimming domestic flights as it faces pressure from rising fuel costs.

The company plans to reduce domestic flying across Qantas and Jetstar by 4% in 2027, on top of changes that have already affected passengers.

Here's what to know

Ahead of its annual shareholder meeting, Qantas issued a market update setting out its plans. The company expects a first-half fuel bill of $3.8 billion for financial year 2027, according to ABC News.

Jet fuel costs have climbed along with crude oil prices. The Middle East war has pushed Brent crude above $100 per barrel, up from roughly $60 before the U.S. attack on Iran in February.

Corporate and government travel remained stable. Qantas said demand for domestic and international flights was resilient despite the cost pressures, "supported by customers redirecting travel away from the Middle East," ABC News reported.

More background

Fuel costs were also behind Qantas's April decision to raise fares and reduce domestic flying.

Higher jet fuel costs shaved hundreds of millions of dollars off its annual profit. In August, Qantas reported $1.3 billion in net profit for 2025/26, down almost 20% year on year.

Underlying pre-tax profit also fell to $2.1 billion, a drop of almost 14%, while revenue rose 7% to $25.5 billion.

What's being done?

For Qantas, hedging offers some protection from volatile prices and unpredictable market movements. Qantas has expanded its hedging to cover roughly 85% of annual fuel spending, predominantly in Brent crude oil.

The company has also abandoned its plan to buy back $150 million in shares, halting a proposed return of money to shareholders as it manages higher operating costs.

Qantas identified corporate and government travel as areas it was watching closely.

"Fuel prices are expected to remain elevated through financial year 2027," Qantas said, per ABC News.

Where can I learn more?

Higher fares and flight cuts are affecting travelers well beyond Australia. 

• U.S. travelers could keep paying high airfares even if jet fuel prices begin to fall.

• American, United, and Southwest are trimming flights as rising fuel costs threaten airline profits.

• Ryanair plans to skip fuel surcharges but expects rivals to introduce them next summer.

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