Qantas and Jetstar are extending cuts to domestic flights by three months and trimming flights to New Zealand as the fuel crisis from the US-Iran war continues to bite.
Australiaโs national carrier said its 5 per cent cut in domestic capacity, which originally ran from May to June, would now be extended to September.
International capacity at Qantas will decline by 2 percentage points in the first quarter of 2027 as the airline redeploys its international fleet. Jetstar said it is also trimming flights to New Zealand.
Airlines globally are grappling with a fuel price spike from the Middle East conflict which has limited supply, reduced capacity, driven up oil and jet fuel costs, and diminished demand for flights in some domestic markets.
The airlineโs announcement comes as the government revealed it secured two shipments carrying 100 million litres of jet fuel, as well as another shipment of 50 million litres of diesel from sources in Asia.
Trade Minister Don Farrell said the additional 100 million litres of jet fuel to Perth and Brisbane and 50 million litres of diesel to Darwin โwill keep our FIFO workers flying, our truckers driving, and our nation moving.โ
โIt gives Australians the peace of mind they need to travel and see their loved ones and to keep exploring our vast and beautiful country,โ Farrell said.
The network adjustments follow Qantasโ mid-April disclosure of a potential $800 million blowout in fuel expenses, driven by the crisis.
โThe Qantas Group continues to take action to mitigate the impact of the conflict in the Middle East, including sustained high fuel costs, and respond to continued strong demand for travel to Europe,โ it said.
Additional Qantas Perth-Rome flights have been extended for another three months, until the end of October, the airline said. Flights between Sydney-Paris via Singapore will continue to operate.
The changes, in response to sustained demand for travel to Europe, will add another 2000 seats to and from Europe each week, the airline said.
Qantasโ service from Sydney to the Indian city of Bengaluru is being temporarily suspended from August and will resume at the end of October. Both Qantas and Jetstar have reduced capacity across the Tasman.
Australiaโs largest source of jet fuel imports โ China โ has signalled a willingness to resume exports of the crucial fuel nearly two months after it curtailed shipments because of uncertainty caused by the conflict in the Middle East.
K2 Asset Management managing director and energy expert George Boubouras said in this market โcancellations will increasingly be normalised if prices stay around current levels for 30 more days.โ
The news from China was โgood for aviation in the short term,โ he said. โBut that is not saying much given the challenges [airlines] face.โ
The prospect of more jet fuel out of China may limit additional flight cancellations and allow airlines to maintain flight routes, said Milford Asset portfolio manager Jason Kururangi. โHaving more jet fuel available for export would definitely be a positive to the global supply-demand imbalance thatโs currently present,โ he said.
โI think it would definitely be an incremental positive for supplies,โ he said. โThen that should result in lower [ticket] prices in the region as well.โ
Within a month of the crisisโ start, Qantas, Jetstar and Virgin began modest reductions to their flights, as well as increases to ticket prices. This week, Fiji Airways said it would cancel its Fiji-Dallas service from September 7 โdue to high fuel costs and changing demandโ.
As the global supply of oil came under strain following Israel and the USโ attack on Iran, reports emerged in mid-March that China would limit its jet fuel exports to support its domestic aviation.
This week, following a meeting with Chinese Foreign Minister Wang Yi on Wednesday, Foreign Minister Penny Wong told this masthead China had agreed to take a โfirst stepโ to resume critical exports of jet fuel to Australia.
Australia uses about 10 billion litres of jet fuel a year, of which more than 80 per cent is imported, numbers from the Australian Institute of Petroleum show. About 2.6 billion litres a year, or 32 per cent, comes from China, another 1.8 billion or 23 per cent is from Singapore.
Itโs not clear how much jet fuel China will release over time.
โWeโll just have to wait and see whether it does have much of an impact,โ Australian Institute of Petroleum CEO Malcolm Roberts said. He said it takes three weeks for China-shipped fuel to arrive in Australia.
โAnything that means weโll see a resumption of jet fuel imports is going to be a relief, although, of course, the problem is the price is still very high. More volume would hopefully put some downward pressure on [ticket] prices,โ he said.
Singapore-based Oxford Economics analyst Sheana Yue said whatever the scale of Chinaโs jet fuel sales, itโs โlikely to be a controlled, targeted easing rather than a full resumption of refined fuel exportsโ.
The concerns that prompted China to stop exports in March โstill matterโ, Yue said, and it will be anxious to protect domestic supply and manage inflation while the Strait of Hormuz remains closed.
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Chris Zappone is a senior reporter covering aviation and business. He is former digital foreign editor.Connect via X, Facebook or email.
