Petrol prices have jumped 50 cents a litre, from $1.69 to $2.19 on average across Australia since the start of the US-Iran war. But the real shock for those planning overseas travel is what's happening at the pumps that fill aeroplanes.
Jet fuel spot prices have hit around double what they were at the same time last month as the Middle East conflict continues. Jet fuel costs have risen 150 per cent in the fortnight since the war began. The result is stark: families who booked European summer trips weeks ago are now shelving their plans. Those still considering travel face eye-watering bills.
The mechanics are straightforward. Fuel and labour represent the two highest costs for virtually every airline in the world, and in response to the conflict, jet fuel has likely surged to become the number-one cost. Fuel typically accounts for 20% to 25% of an airline's operating costs, making it the second-largest expense after labour. When fuel costs double, airlines have little choice but to pass the burden to passengers.
Virgin Australia has become the latest airline to hike domestic fares by around five per cent as the Middle East conflict continues. Qantas said on 10 March it would hike fares on its international routes and was considering adding capacity on its existing Europe routes in the coming months. But the airline has gone further. Qantas said this week it would review its international airfares every two weeks, signalling that the initial increases may only be the beginning.
The pressures extend beyond simple fuel cost pass-through. To avoid closed or high-risk skies, carriers are charting detours that can extend block times by 45 minutes to two hours on some routes, increasing fuel burn and crew costs per flight, with those extra costs feeding directly into higher fares. For Australians looking to travel to or through the Middle East, the removal of millions of airline seats from flight schedules has pushed serious demand onto other routes, driving fares upward through sheer scarcity.
The scale of disruption is becoming clearer. An aviation analyst expects flight costs to rise by as much as 30 per cent through to the end of the year. Qantas's European routes, including Perth-London, Perth-Paris and services via Singapore, are more than 90 per cent full in March, which is approximately 15 percentage points higher than normal for this time of year. Passengers are booking earlier to lock in prices before the next round of increases arrives.
Globally, the picture is darker. Air New Zealand has announced the cancellation of 1,100 flights over the next two months in response to rising fuel prices, expected to affect approximately 44,000 passengers, representing about 5% of the airline's scheduled flights. Scandinavian Airlines said it will cancel at least a thousand flights in April due to surging fuel prices. European carriers are making similar moves.
What makes Australia's position particularly fragile is its dependence on fuel imports. Local refinery production of aviation turbine fuel was about 1.4 billion litres in 2025, compared with roughly 8.1 billion litres imported. Australia imported about 32% of its jet fuel from China in 2025; without these exports, Australia must turn to other countries such as South Korea, Taiwan, Singapore, Malaysia and India. China had notified oil refiners to halt all exports, casting doubt over at least two cargoes due to be shipped to Australia.
The government has released portions of its strategic reserves, but the runway is short. As of mid-March 2026, the Department of Industry, Science and Resources confirmed Australia has approximately 29 to 32 days of jet fuel in reserve. For a country wholly dependent on continuous fuel deliveries from across the Indian Ocean and South China Sea, this represents thin protection if global disruptions worsen.
For now, airlines are managing. Transport Minister Catherine King reassured Australians that short-term jet fuel supplies are secure and that Qantas and Virgin Australia are "well placed" to handle immediate disruptions, while Energy Minister Chris Bowen said fuel continues to arrive in Australia, and every expected delivery has delivered, with refineries continuing to produce at full capacity. But that complacency carries risk.
The practical advice to travellers is simple. Experts say travelers planning summer trips may be able to limit the impact of rising airfares by booking earlier rather than waiting for last-minute deals; locking in ticket prices sooner with flexible booking options can help secure lower prices before airlines adjust rates further. For many Melburnians, that window may already be closing.