Qantas Extends Domestic and International Capacity Cuts as Fuel Crisis Bites

Key facts

• Qantas and Jetstar extend domestic capacity cuts of 5% through September 2026.
• International capacity reduced by 2% in Q1 FY27; trans-Tasman flights cut by 4 percentage points.
• Additional Perth-Rome flights extended until end of October 2026.
• Sydney-Bengaluru service suspended from August, resuming end of October 2026.
• Qantas Group adds about 2,000 extra seats per week to and from Europe.
• Australia secures 100 million litres of jet fuel and 50 million litres of diesel from Asia.
• Trade Minister Don Farrell says fuel shipments will keep FIFO workers, truckers, and nation moving.
• Qantas disclosed potential $800 million blowout in fuel expenses in mid-April.

Fuel Crisis Forces Qantas to Extend Capacity Cuts into Next Financial Year

The Qantas Group has delivered a stark update for Australian travellers, extending previously announced schedule changes across its international and domestic network into the first quarter of the 2027 financial year. The airline cited sustained high fuel prices and ongoing disruption from the Middle East conflict as the primary drivers. The group said it was continuing to adjust its network to mitigate the impact of the conflict, including elevated fuel costs, while responding to continued strong demand for travel to Europe. The changes, which affect flights between July and September, reduce planned Group international capacity by 2 per cent for that period.

Domestic and Trans-Tasman Services Hit Hardest

Domestically, the group has extended earlier capacity reductions of 5 per cent through to the end of September, largely affecting major capital city routes. Both Qantas and Jetstar have also reduced capacity across the Tasman, with trans-Tasman flights cut by 4 percentage points. Jetstar NZ is trimming flights within New Zealand as well. The cuts represent a significant scaling back of operations in the airline's home market and its key trans-Tasman corridor. The group said customers affected by the changes were being contacted directly and offered alternative flights or refunds.

Europe Services Expand as Demand Surges

Despite the overall capacity reductions, Qantas is adding services to Europe to meet continued strong demand. The airline’s additional Perth–Rome services have been extended until the end of October, while flights to Paris will scale back to three return services per week from August as previously planned, operating from Sydney via Singapore. Collectively, the changes add about 2,000 extra seats per week to and from Europe. The airline said the adjustments reflect sustained demand for European travel, even as other markets contract.

India Route Suspended, Fuel Supply Secured

Not all international routes are growing. Qantas has temporarily suspended its Sydney-Bengaluru service from August, with a planned return at the end of October. The suspension comes as the airline reallocates aircraft to more profitable routes. Meanwhile, the Australian government has secured two shipments carrying 100 million litres of jet fuel, as well as another shipment of 50 million litres of diesel from sources in Asia. Trade Minister Don Farrell said the additional fuel would keep FIFO workers flying, truckers driving, and the nation moving. Australia’s largest source of jet fuel imports, China, has signalled a willingness to resume exports after curtailing shipments due to Middle East uncertainty.

Fuel Cost Blowout and Industry-Wide Pressures

The network adjustments follow Qantas’ mid-April disclosure of a potential $800 million blowout in fuel expenses, driven by the crisis. Airlines globally are grappling with a fuel price spike from the Middle East conflict, which has limited supply, reduced capacity, driven up oil and jet fuel costs, and diminished demand in some domestic markets. K2 Asset Management managing director and energy expert George Boubouras warned that cancellations will increasingly be normalised if prices stay around current levels for 30 more days. The Qantas Group said it continues to take action to mitigate the impact, including sustained high fuel costs.

Outlook: Capacity Constraints Likely to Persist

The global squeeze on aviation capacity is set to continue into next financial year, with Qantas and Jetstar extending schedule changes as high fuel prices and ongoing Middle East disruption reshape international demand. The airline group has pushed adjustments into the first quarter of FY27, indicating that the crisis is far from over. With fuel prices remaining significantly elevated and geopolitical tensions unresolved, travellers can expect further disruptions. The group’s ability to redeploy aircraft to high-demand routes like Europe offers some relief, but the overall picture is one of constrained capacity and higher costs.

The bottom line

• Qantas and Jetstar have extended domestic capacity cuts of 5% through September 2026, affecting major capital city routes.
• International capacity is reduced by 2% in Q1 FY27, with trans-Tasman flights cut by 4 percentage points.
• Additional Perth-Rome services are extended until end of October, adding 2,000 weekly seats to Europe.
• Sydney-Bengaluru service is suspended from August to end of October.
• Australia secured 150 million litres of fuel from Asia, with China signalling resumed jet fuel exports.
• Qantas faces a potential $800 million fuel expense blowout, and industry experts warn of normalised cancellations if prices persist.