Summary
The price of jet fuel has increased by 125% due to the US-Israel conflict with Iran, causing Qantas and Virgin Australia to raise ticket prices and reduce flights. Fuel costs are a major expense for these airlines, and the higher prices and limited supplies are affecting their earnings and operations.
Key Facts
- Jet fuel prices rose from about $155 to $210 per barrel since early 2022 due to Middle East conflict.
- Jet fuel costs have increased much more than petrol or diesel prices in Australia.
- Asian oil refineries are producing less jet fuel because they have less crude oil to work with.
- Fuel makes up about 20% of airline running costs for Qantas and Virgin Australia.
- Both airlines announced flight cuts and fare increases to handle higher fuel costs.
- Analysts predict Qantas’s profits will be lower in the current and next financial year.
- Airlines say they have fuel supply secured until at least May.
- Experts expect airfares to stay higher for a long time and fewer discounted tickets to be available.
