The cost of getting to Europe just jumped. Qantas raised international fares this week as jet fuel prices spiralled following military strikes in the Middle East, a pattern now repeating across airlines worldwide. The crisis exposes a hard truth about Australia's dependence on global energy markets: when trouble erupts thousands of kilometres away, Australian wallets feel the impact within days.
Qantas Group said the cost of jet fuel had risen 150 per cent in the past fortnight, yet these higher costs were always going to be passed on. Qantas International is raising fares, with the increases varying depending on the route. Strong demand saved the airline from absorbing losses; Qantas routes to Europe, including Perth-London, Perth-Paris and services via Singapore, significantly more booked than usual. When flights to Europe are over 90% full and demand shows no sign of weakening, airlines have little reason to hold prices steady.
The broader context is sobering. The price of jet fuel at Asia's key hub Singapore, soared by 140% last week compared to February 27, the day before the war in Iran began. For Australian carriers, this creates a squeeze that hedging strategies alone cannot absorb. Qantas has hedged 81% of its fuel for the latter half of the financial year, meaning roughly one-fifth of exposure remains unprotected.
Air New Zealand faced the same pressure with added vulnerability. The airline said jet fuel's pricing was made up of two elements, the cost of Brent crude and the refinery margin. Air NZ is mostly hedged against Brent crude, but like most of its peers is exposed to movement in the refinery margin, known as the "crack spread". The crack spread had spiked from about $US22 per barrel before the conflict to as high as $US115 per barrel. The airline has suspended FY2026 guidance until fuel markets and operating conditions stabilise.
The friction extends beyond fares. Virgin Australia said flights operated by its codeshare partner Qatar Airways had been cancelled given the security situation in the Middle East. Twenty-two flights between Australia and Qatar's capital of Doha had been cancelled from Tuesday through Friday. Rerouting adds fuel burn and time; industry estimates suggest that rerouting a single long-haul flight can add 90–120 minutes of flying time.
What makes this episode reveal something worth paying attention to is the speed of transmission. Global disruptions flow directly to Australian consumers because Australia imports most liquid fuel. As an importer of liquid fuel, Australia is highly susceptible to oil prices spikes, meaning global shocks flow directly to the pump. The Strait of Hormuz closure is geographically distant; the effect on ticket prices is immediate.
There are counterarguments worth acknowledging. Some observers point out that strong passenger demand reflects genuine appetite for travel. Qantas pushing prices upward during peak booking periods reflects ordinary economics: scarcity commands a premium. The airline remains committed to servicing those routes, and demand has not collapsed. Economists also note that fuel costs are only one variable in airfare pricing; capacity constraints and booking patterns matter equally. There is no liquid fuel market to regulate, so the only protection we have as importers is the Australian Competition and Consumer Commission (ACCC), which monitors exploitative retail behaviour. The ACCC can intervene to prevent price gouging and unconscionable practices, but it has no power over the market. Therefore, it cannot insulate consumers against normal market increases.
The uncertainty persists. Global oil prices have retreated somewhat from their worst levels, but airline operators remain cautious. If the Middle East conflict continues to disrupt airspace or energy supply chains, the industry could face a prolonged period of elevated costs that will cut dangerously into narrow margins and force airlines to raise airfares. For Australian travellers booking European trips, the lesson is practical: lower fares are disappearing fast, and waiting for relief may mean paying more later.