Virgin Australia will slightly reduce domestic flights in the next few months as it faces a hit from fuel costs due to the Iran war.
The airline will cut its domestic capacity by 1 per cent in the three months to June 30.
It expects fuel costs to be $30-40 million more than it had previously expected in the second half of this financial year.
Virgin said its fuel suppliers had provided assurances about near-term aviation fuel supply “to support its operations well into May 2026”.
“The price of jet fuel has been extremely volatile and more than doubled since the end of February 2026 which impact fuel costs for the June 2026 quarter,” it said.
The airline said it would increase fuel hedging in the short term to mitigate the price volatility, “with other operational levers including fare and capacity adjustments available to be implemented over time”.
Virgin issued a market update after rival Qantas yesterday flagged an up to $800 million hit from additional fuel costs, and cut its domestic flight capacity.
While Virgin’s domestic capacity will be cut in the current quarter, it still expects domestic capacity to be 1 per cent higher over the second half of the financial year as a whole.
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