Qantas Airways Ltd. is pushing up fares and making deeper cuts to scheduled flights in Australia to offset months of higher fuel costs.
A sustained increase in fuel prices means Qantas needs to “rebalance capacity and fares,” the airline said Thursday. Domestic services in July and August will fall to 103% of pre-Covid levels from 107%. Qantas had already cut flying in Australia next quarter to 110% of pre-pandemic volumes from a planned 115%.
Russia’s invasion of Ukraine has sent oil prices soaring, with crude above $100 a barrel for the majority of the time since early March. Sydney-based Qantas had warned it might have to raise fares if higher fuel costs persisted. The airline didn’t elaborate on airfare changes.
Cutting flights means Qantas can fill more of the seats on its remaining services, driving up revenue on those routes without buying much additional fuel. Every $4 jump in the oil price adds 1% to air fares, Qantas has said.
Qantas rose as much as 2.6% Thursday. The shares are up about 9% this year.