Australian airline Qantas has increased ticket prices and reduced domestic flight operations in response to heightened demand for routes avoiding the unstable Middle East region. The company announced it is shifting resources from U.S. and local networks to capitalize on growing interest in trips to European destinations like Paris and Rome, as detailed in a market report issued on Tuesday. Qantas intends to decrease domestic capacity by approximately 5%, focusing on less busy periods. Airlines from the Persian Gulf, such as Emirates, Etihad, and Qatar, have scaled back operations due to the ongoing conflict involving Iran, leading travelers to choose other options. While Qantas gains from increased bookings on Asia-transit flights to Europe, it faces escalating jet fuel expenses driven by higher oil prices linked to the same regional tensions. In a statement released Tuesday, Qantas explained it has implemented measures to counter the Middle East situation’s effects, including adjustments to international routes, capacity reductions, and price hikes. The airline now projects its fuel costs for the latter half of the 2026 fiscal year to range from $3.1 billion to $3.3 billion, an increase from the earlier estimate of $2.2 billion. To address these higher expenses, Qantas has raised fares and focused on popular European paths. It indicated that additional steps, possibly further price adjustments, might be necessary. Carriers often use hedging agreements to secure fuel prices and mitigate cost fluctuations. Following the market update, Qantas stock dropped over 3% in early Tuesday trading.
