Qantas, Virgin Australia drop domestic fares to as low as $99 and $55 in response to soaring fuel costs and weakening travel sentiment

Australia’s two biggest airlines have launched a major fare war this week, rolling out unprecedented domestic ticket sales while grappling with rapidly rising jet fuel costs that are reshaping airline operations and pricing across the industry.

In a striking turnaround, Qantas Airways announced a week-long domestic fare sale offering more than two million discounted seats on its domestic and regional network, with one-way Economy fares starting from $99 and Business fares from $299.

The sale spans more than 90 routes and applies to travel through March 2027, including popular peak windows such as the June long weekend and winter school holidays, a rare extended sale for Australia’s flagship carrier.


Notable deals include economy fares like Byron Bay to Sydney for $99, and Perth to Sydney or the Gold Coast for around $309, while business seats on select city pairs are available from $299.

Qantas Domestic CEO Markus Svensson said the sale targets travellers planning trips across the next 12 months, following a “bumper” Easter travel period that saw over a million passengers on the airline’s domestic network.

Just one day earlier, Virgin Australia kicked off its own domestic fare discount campaign, offering approximately 500,000 seats with ultra-low prices starting from as little as $55 one-way on select routes, for example, Sydney to Byron Bay, and slightly higher on other major city connections.

These fares are available for travel from mid-May to December 2026, and the sale runs through April 26.

Virgin’s sale is part of a broader pricing strategy in response to increased operating costs, including a forecasted fuel bill rise of between A$30 million and A$40 million for the remainder of fiscal 2026 due to volatile global fuel markets.

The sudden fare promotions come amid mounting financial pressure from global jet fuel volatility based on geopolitical tensions in the Middle East and constrained refining capacity, factors that have more than doubled jet fuel prices since late February 2026.

Fuel now represents about 20-21% of variable operating costs for airlines, and the surge has forced major carriers into operational adjustments.

Last week, Qantas warned its jet fuel bill could rise by up to A$800 million for the second half of the financial year, prompting the airline to cut around 5% of domestic capacity and suspend several regional routes to conserve costs.

Virgin Australia has similarly adjusted its operations, projecting elevated fuel expenses and tightening capacity even as it tries to hedge against further volatility.