Qantas not ruling out higher fares if fuel costs continue to soar

UPDATE – If the trend of rising fuel prices continues in the coming weeks, Qantas will have to raise ticket prices to recover costs. The Australian carrier said in a market update on September 25 that rising fuel costs will impact its HY1 FY2024 fuel bill by some A$200 million to A$2.8 billion.

Since May, fuel costs have gone up by thirty percent, of which ten percent just in August, says Qantas. The increase is not only from higher crude oil prices, but also from higher refiner margins (the so-called jet crack), and adverse exchange rates of the Australian dollar. In a market update webinar last week, IBA Group also noted that the jet crack between crude oil and refined jet fuel has recently widened again.

Qantas says that it “will continue to absorb these higher costs, but will monitor fuel prices in the weeks ahead and, if current levels are sustained, will look to adjust its settings. Any changes would look to balance the recovery of higher costs with the importance of affordable travel in an environment where fares are already elevated.”