Virgin Australia cuts corporate staff amid rising fuel costs and Mideast conflict
Virgin Australia has laid off some employees in corporate roles, in the latest sign of a contraction in the aviation industry as it grapples with high costs triggered by the Middle East war.
The airline declined to say how many people were laid off but described the reduction as an “adjustment” it makes “from time to time.”
A spokesman for the airline said: “Like all businesses, we continually review our operating model to ensure we remain a strong and resilient business over the long term.”
“As part of this focus, as we do from time to time, we have recently made some adjustments affecting a small number of enterprise roles.”
Airlines have been under cost pressure since the outbreak of war with Iran in February, which caused chaos in global aviation and increased oil prices and, by extension, jet fuel prices.
Virgin has been forced to cut flight schedules and increase ticket prices to help maintain its profit margin.
The company’s comprehensive fuel hedging strategy limits fuel-related cost growth to $30 million to $40 million in the second half of 2026.
Virgin’s layoffs of non-customer-facing staff follow a similar move by Qantas, which announced it would cut 400 jobs at its headquarters in December. Layoffs leaked to corporate gossip site Australian Corporate.
The aviation industry faces the dual pressure of high structural costs caused by the oil crisis in the Middle East, as well as the drive to gain efficiencies from the application of new technologies.
This trend has also recently seen the elimination of banking jobs at the Commonwealth Bank, National Australia Bank and Bendigo and Adelaide Bank; ANZ Bank, meanwhile, announced sweeping redundancies last year.
Still, underlying demand for air travel remains strong.
Virgin’s pre-tax earnings, announced before the Middle East crisis, rose 11.7 percent to $490 million in the six months to the end of December. Virgin was helped by strong revenue growth and leisure demand during that period.
But conditions have changed for the global industry; The cost of fuel and fuel shortages have negatively impacted profits and the number of routes airlines fly.
Data from aviation analytics company Cirium shows that global capacity decreased by nearly 3 percentage points in May. The Albanian government said on Tuesday it had secured three shipments of jet fuel from China. Qantas, which may face additional fuel costs of up to $800 million in the second half of 2026, said it welcomed this development.
On Friday, low-cost carrier AirAsia said it was disrupting its daily Melbourne-Bali flights, less than three months after the flights began, because the routes were no longer valid.
AirAsia Indonesia general manager Achmad Sadikin Abdurachman said the decision was taken “in response to the sustained increase in global jet fuel prices caused by the ongoing geopolitical uncertainty in the Middle East.”
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