Flights cancelled, prices hiked amid fuel crisis in Australia: Everything Aussie travellers need to know

Australian travellers are facing higher airfares, fewer flights, and route cancellations as airlines respond to a sharp rise in global jet fuel prices. The surge in fuel costs, driven by instability in global oil markets, is forcing carriers to rethink route viability, reduce capacity, and pass part of the burden onto passengers.

Here’s a breakdown of what’s changing, who is affected, and what travellers should expect in the coming weeks.

Qantas cuts domestic flights and raises fares

Qantas has confirmed it will increase fares across parts of its network while also temporarily suspending around 5% of its domestic capacity.

A key change affecting regional travellers is the decision to end flights between Adelaide and Mount Gambier from May 18. The airline described the service as “no longer viable” under current fuel and demand conditions.

Qantas has signalled that surging jet fuel costs could add as much as AU$800 million (about US$570 million) to its fuel bill in the second half of fiscal 2026. The airline now estimates its fuel spend for that period will be between AU$3.1 billion and AU$3.3 billion, up from a prior forecast of roughly AU$2.5 billion.

Virgin Australia lifts prices, reduces capacity

Second-largest carrier Virgin Australia has also flagged higher fuel costs, although on a smaller scale due to extensive hedging. The airline forecasts its fuel expenses will be A$30-40 million (about US$21-28 million) higher in the second half of fiscal 2026 than previously expected.

To offset this pressure, Virgin has implemented airfare increases and a 1% reduction in domestic capacity for the June quarter. Despite the adjustments, Virgin says its full-year earnings outlook remains unchanged, supported by its hedging position and strong travel demand.

Travellers on popular domestic routes may notice fewer flight options and slightly higher ticket prices in the coming weeks.

Fiji Airways makes adjustments too

The impact is not limited to Australian carriers. Fiji Airways has confirmed that from April 25, it will temporarily suspend services FJ922 and FJ923, while a daily service will continue to operate, ensuring continued connectivity with minimal impact on customers.

The airline stated that the route has become “no longer sustainable” due to soaring fuel prices. This reduces options for travellers flying between Australia and the Pacific and is a sign that international routes are also under pressure.

Why are airfares rising?

Jet fuel is one of the largest expenses for any airline, often accounting for 25-35% of operating costs. In recent weeks, fuel prices have climbed steeply due to tightening oil supplies and refining constraints linked to geopolitical tensions in the Middle East.

Airlines typically hedge fuel purchases months in advance, but when price spikes are prolonged or extreme, carriers are left with little choice but to raise fares, cut less profitable routes, and trim flight frequency to protect margins.

What this means for Aussie travellers

For passengers, the changes translate into:

• Higher ticket prices across domestic and some international routes
• Fewer flights, particularly on regional or lower-demand services
• Reduced flexibility when booking last-minute travel
• Possible further adjustments if fuel prices remain volatile

Are more cuts coming?

Airlines globally are monitoring fuel markets closely. If prices stabilise, some suspended routes may return. If not, travellers could see longer-term structural changes to flight networks, especially on marginal regional services.