Virgin Australia forecast an extra $30 to 40 million in fuel costs<\/a> for the period between January and June.<\/p>\n“Airlines are generally able to pass through only part of fuel cost increases to passengers,” Dr Zhang said.<\/p>\n
“This means fare increases often do not fully compensate for rising fuel costs.”<\/p>\n
![\"Close-up](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/06\/ed05d273cf41afe046b0b8af6aed7510.jpeg\")
<\/p>\n
Virgin Australia forecast an extra $30 to 40 million in fuel costs earlier this year.\u00a0 (ABC News: Chris Gillette)<\/p>\n
How much did fares go up by?<\/p>\n
That’s hard to say.<\/p>\n
Virgin increased its domestic fares by about 5 per cent since March, according to a domestic airline report from the Australian Competition and Consumer Commission (ACCC) earlier this month.<\/p>\n
Meanwhile, the Qantas Group has not disclosed its fare increases, the ACCC says.<\/p>\n
The ACCC’s report included data on fares for flights in May but those flights were booked in March \u2013 an important caveat given the war began on February 28.<\/p>\n
Its data also looked at how much revenue airlines made per passenger, but said it was also skewed by people booking tickets well in advance.<\/p>\n
Airlines didn’t just raise fares<\/p>\n
Raising ticket prices isn’t the only way airlines recoup losses from higher fuel prices. They can also tweak how the operate.<\/p>\n
This can include:<\/p>\n
Cutting flight frequenciesOperating smaller aircraftTemporarily suspending unprofitable routesGrounding aircraft to reduce fuel consumption<\/p>\n
“These measures are collectively referred to as capacity adjustments, which generally reduce the number of available seats in the market,” Dr Zhang said.<\/p>\n
This can help to maintain customer demand, even as prices sting a little.<\/p>\n
“Capacity is supply, so where that is reduced, even if overall demand\u00a0remains stable, that demand is vying for fewer seats, which will ultimately raise fares,” Mr Brownjohn said.<\/p>\n
The Qantas Group and Virgin flagged changes to their capacity in their market updates back in April.<\/p>\n
We can only guess at what the airlines’ strategies will be in the coming months, but experts aren’t expecting immediate changes.<\/p>\n
“Airlines will make best use of the lower fuel prices and maintain strong focus of capacity discipline,” Mr Brownohn said.<\/p>\n
“If fares can remain high in the immediate short-term, this allows the airline to recover at least some of the additional fuel costs they have endured of late.”<\/p>\n
![\"crowds](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/06\/7b0ceae616e10326bc81540b7f49cf53.jpeg\")
<\/p>\n
Domestic fares may be slower to drop than prices for international tickets.\u00a0 (ABC News)<\/p>\n
When will flights get cheaper?<\/p>\n
Probably not until demand drops \u2014 that is, when more people stop buying tickets at higher prices.<\/p>\n
And expect to see a drop in the price of overseas flights before most domestic fares.<\/p>\n
“International fares are more competitive than domestic fares so we will see faster moderation of fares in those markets,” Mr Brownjohn says.<\/p>\n
“But unfortunately, that is not where the primary profit driver is for Australian airlines.<\/p>\n
“In the face of an immediate decrease in fuel prices, for example, domestic fares will likely only reduce off the back of reduced demand.<\/p>\n
“Once the airline starts struggling to fill those domestic seats at the higher fares, that’s where we will start to see more wholesale reduction is pricing.”<\/p>\n
ABC with Reuters<\/p>\n","protected":false},"excerpt":{"rendered":"The global jet fuel price has dropped after the US and Iran signed a preliminary ceasefire deal, which…\n","protected":false},"author":2,"featured_media":762611,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[3859,185170,8170,2095,64,63,99,22131,264833,363828,37630,35431,293298,125729,151242,206980,151870,85565,143126,3792,2489],"class_list":["post-762610","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-air-travel","tag-airfares","tag-airlines","tag-america","tag-au","tag-australia","tag-business","tag-ceasefire","tag-flight-prices","tag-flight-tickets","tag-flights","tag-fuel","tag-hormuz-strait","tag-international-flights","tag-international-travel","tag-iran-war","tag-jet-fuel","tag-planes","tag-strait-of-hormuz","tag-travel","tag-us"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/762610","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=762610"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/762610\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/762611"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=762610"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=762610"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=762610"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"Image](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/06\/6bf6bee45ac6cd73c93b76bcdd47d54c.jpeg\")
<\/p>\n