Australia’s largest carrier Qantas will slash domestic seats as it grapples with significantly higher jet fuel costs due to the US-Iran war.
The Sydney-based company will reduce domestic capacity by 5pc in April-June due to economic uncertainty and elevated refuelling costs, which it said meant it will now spend A$3.1bn-3.3bn ($2.2bn-2.34bn) for jet fuel in January-June, the second half of its fiscal year, up from a February forecast of A$2.5bn.
The rise of A$600mn-A$800mn is due to refining margins increasing from $20/bl in February to about $120/bl, which it cannot hedge against. Jet fuel prices have more than doubled and remain highly volatile, the firm said.
This follows cuts to services on Qantas’ low-cost subsidiary Jetstar between Australia and New Zealand and state-controlled carrier Air New Zealand’s reduction of some services last month.
Qantas’ jet fuel consumption for July-December was about 88,000 b/d, up from 85,000 b/d a year earlier.
The airliner’s fuel expense for July-December 2025 was A$2.61bn, slightly above its A$2.6bn guidance, but less than capacity additions, it said.
Argus’ jet-kerosine fob Singapore assessment was $214.45/bl on 13 April, up from $85.65/bl on 16 February.
Jet fuel price A$/litre
