Qantas raises fares and cuts domestic flights as travel patterns shift due to Middle East turmoil | Qantas

Qantas has increased fares and cut domestic flights amid a surge in demand for travel from airlines transiting the troubled Middle East.

The Australian airline said it is redeploying capacity across its US and domestic network to capitalize on strong interest in travel to Europe – particularly to Paris and Rome – according to a market update published on Tuesday.

Qantas plans to reduce domestic capacity by around 5%; off-peak services are a likely target.

Carriers in the Persian Gulf, including Emirates, Etihad and Qatar Airways, are reducing services due to the conflict in Iran, prompting passengers to seek alternatives.

While Qantas is benefiting from demand for flights transiting through Asia, it says its jet fuel bill has risen sharply due to rising oil prices resulting from the Iran conflict.

“The group has taken action to reduce the impact of the conflict in the Middle East, including international network changes, capacity adjustments and fare increases,” Qantas said in a statement on Tuesday.

Qantas said its expected fuel bill for the second half of financial year 2026 would be between $3.1 billion and $3.3 billion, down from a previous estimate of $2.2 billion.

To offset rising fuel costs, Qantas has increased ticket prices and prioritized flights to high-demand European routes.

He warned he may need to take “further action”, possibly referring to further air fare increases.

Airlines partially protect themselves against fuel increases by using hedging contracts that fix the price of future fuel consumption.

Qantas shares lost more than 3% in early trading after it released its market update on Tuesday.