Breaking: Qantas cuts domestic flights and raises fares as fuel costs blow out

Lead

Qantas has announced significant cuts to its domestic flight schedule, including the cancellation of all services to the regional South Australian city of Mount Gambier, as the airline grapples with a sharp rise in jet fuel prices and softening demand. The airline also flagged that its fuel costs could rise by up to $800 million, prompting a reduction in domestic capacity across both Qantas and its subsidiary Jetstar.

Virgin Australia has followed suit, announcing a 1 per cent reduction in domestic flights for the quarter ending June 30, citing similar pressures from volatile fuel prices.

The moves come as global supply disruptions—exacerbated by conflict in the Middle East—have pushed jet fuel prices to record levels, according to reports from Australia's public broadcaster, ABC.

Coverage Comparison

Multiple reports from ABC covered the announcements from Qantas and Virgin Australia, with a focus on the financial impact of fuel costs, the effect on regional connectivity, and the response from the competition watchdog and unions.

Initial reports highlighted Qantas's decision to cancel all flights between Adelaide and Mount Gambier starting May 18, leaving Regional Express (REX) Airlines as the sole operator at the regional airport. The airline cited both rising fuel costs and declining demand for the route.

Broader coverage detailed the fuel cost surge: jet fuel prices have more than doubled since late February, according to Qantas, increasing its estimated fuel bill for the second half of the financial year from $2.5 billion to up to $3.3 billion. The airline said it had increased fares, adjusted capacity, and made changes to its international network to mitigate the impact.

Virgin Australia's market update, reported separately, said it expects fuel costs to be $30–40 million higher than previously anticipated in the second half of the financial year. The airline added that its fuel suppliers had assured near-term supply well into May 2026.

One report focused on the impact on aviation workers, noting that the Transport Workers' Union (TWU) said staff found out about potential job impacts through the media. The union expressed concern over regional base closures and job losses, though Qantas confirmed that its own employees would not be affected by the flight reductions.

A separate story examined the wider market, reporting that Australians are finding domestic flights for as little as $65 on some routes, while others, particularly in regional areas, face much higher fares. The ACCC confirmed it was monitoring price movements and market behaviour.

Key Claims

• Qantas will cancel all services to Mount Gambier from May 18, citing fuel costs and declining demand (reported by multiple ABC sources).
• Qantas will reduce domestic capacity by 5 percentage points across its mainline and Jetstar operations between May 18 and June 30 (reported by multiple sources).
• Qantas's fuel bill is expected to increase by $600–800 million, with total second-half fuel costs estimated at up to $3.3 billion (reported by Qantas and carried by ABC).
• Jet fuel prices have more than doubled since late February amid global supply disruptions (attributed to Qantas statements and ABC reporting).
• Virgin Australia will cut domestic capacity by 1 per cent in the June quarter, expecting fuel costs to be $30–40 million higher than previously forecast (reported by ABC).
• Australians can find flights for as little as $65 on certain routes, while regional routes can be significantly more expensive (reported by a single ABC article).
• The ACCC is monitoring airline pricing and market conduct (as stated by ACCC Commissioner Anna Brakey in a report).
• TWU says aviation staff learned of potential job impacts via the media (reported by ABC, attributed to the union).

Perspectives

Airline Perspective

Qantas and Virgin Australia have framed their decisions as necessary responses to extraordinary fuel price volatility, which they say has more than doubled since February. Both airlines have emphasised measures such as hedging, fare adjustments, and capacity management to mitigate the impact, while Qantas says it is working with government and suppliers to ensure fuel supply.

Regional Community and Union Perspective

The Transport Workers' Union has expressed concern over the impact on regional communities and workers, criticising Qantas for what it sees as a pattern of regional base closures and job losses. The union has called for better regulation to protect services to regional areas, noting that airport-based contractor staff may face uncertain futures.

Consumer and Market Perspective

Reports note a widening gap between heavily discounted leisure fares and higher-priced regional or business routes. Experts say airlines are adjusting pricing based on demand, while the ACCC says it is closely watching market behaviour to ensure compliance with competition and consumer laws.

Corrections and Updates

This article is based on reports published on April 14, 2026. Qantas's initial announcement did not specify all route changes; ABC has asked the airline for a full list. Details on job impacts for contractor staff have not been fully clarified by Qantas.