Major airline that flies from Heathrow Airport cuts flights over £400m fuel bill

Australian airline Qantas will cut domestic capacity and expects to pay hundreds of millions of pounds more for fuel in 2026 as oil prices have spike as a result of the Middle East conflict. Rising oil prices have hit the aviation sector after Iran blocked the movement of oil tankers through the critical Strait of Hormuz trade route following joint US-Israeli strikes on several key Iranian sites over the past six weeks. About 20% of all global oil traded passes through the strait. International and domestic carrier Qantas, which operates flights from Heathrow Airport, has said higher international airfares would only partly offset the higher fuel costs. The airline expects to pay between $3.1 billion and $3.3 billion Australian Dollars for fuel in the six months to June 30 despite hedging its oil supply, the Australian Financial Review reported. This is because the company cannot hedge refinery costs, which have risen five-fold. That will add between $600 million and $800 million, around £400m, to Qantas’s expected fuel bill for the second half of the year, although this will be partly made up for in better than previously expected earnings from international flights. Qantas expects to earn double revenues per available seat kilometre, a key measure for airlines, from international flying after major Middle Eastern airlines were forced to reduce services amid the conflict. The higher fuel costs and looming scarcity of supplies have pushed Qantas to cut domestic and regional services, reducing seat capacity by 5 per cent in coming weeks. The airline will axe flights that are not full and increasingly consolidate services on busy capital city routes, the Australian Financial Review reported. "The group is working closely with the government and jet fuel suppliers who continue to provide confidence in fuel supply for the remainder of April and well into May. We are closely monitoring the situation given the ongoing uncertainty in global fuel supply chains," Qantas said in a statement.