ACCC: Higher jet fuel prices driving 'significant' changes in how airlines operate

Australian Competition and Consumer Commission (ACCC) reported (16-Jun-2026) the following highlights from its latest Domestic Airline Competition report:

• Australia's domestic airlines responded to higher jet fuel prices by increasing airfares and reducing seat capacity on some routes. Ongoing conflict in the Middle East has disrupted global fuel markets and jet fuel prices were over 40% higher in early Jun-2026 compared to mid Feb-2026, increasing cost pressures across the aviation sector;
• Jet fuel refining margins also remain "significantly elevated". The spread between the price of Brent crude and jet fuel was 64% higher in early Jun-2026 than in Feb-2026;
• Qantas Group and Virgin Australia both locked in part of their fuel costs ahead of time to reduce the short term impact of higher prices. Rex Airlines reported that due to its smaller scale, it does not hedge against jet fuel prices. In response to elevated fuel costs, Qantas Group and Virgin Australia have reduced or suspended several domestic services, increased some airfares, and continued targeted sales to boost demand on more price-sensitive routes;
• Virgin Australia has reportedly implemented a fare increase of around 5% across domestic economy and business services since Mar-2026. Qantas Group has not disclosed the size of its fare increase. As indicated by revised forecasts published in Apr-2026, both major airline groups are expecting to recover at least some of the additional costs in jet fuel by raising fares and reducing capacity. This has meant higher prices and less choice for some consumers;
• Jet fuel and brent crude have generally increased in price over the time period but passenger demand has remained steady, supported by holidays and major events. Easter school holidays and major events contributed to the busiest April for domestic travel since 2019;
• Domestic airlines carried around five million passengers in Mar/Apr-2026, while seat capacity increased 1.9% year-on-year in Apr-2026;
• On time arrival rates were lower and flights were cancelled more frequently in Feb/Mar-2026, before improving in Apr-2026;
• In Apr-2026, the industry average on time arrival rate was 82.9%, the "best result" reported since Feb-2022. Qantas' 85.8% on time performance was the strongest of any airline since Feb-2022.

ACCC commissioner Anna Brakey stated: "Higher jet fuel prices are driving significant changes in how airlines operate, including reducing or suspending services and increasing fares on some routes". Ms Brakey continued: "We've seen services paused or withdrawn on routes such as Adelaide to Mount Gambier, Alice Springs to Brisbane and Darwin to the Gold Coast, meaning fewer travel options for some communities". She said: "With many travellers booking well in advance, particularly around holidays and major events, the latest data does not fully show the effect of higher airfares". Ms Brakey added: "We expect this to become clearer over coming months and will continue to monitor the impact on consumers and the broader aviation sector". [more - original PR]