Source : THE AGE NEWS
Jetstar has cut more than 10 per cent of its scheduled flights between Australia and New Zealand, as well as within New Zealand, as the Middle East oil price shock bites into demand.
The airline said 12 per cent of scheduled services – including flights between Auckland and Sydney and Auckland and Brisbane – have been cut, in a move described as “temporary”.
“We have made some temporary changes to our schedule, including due to a rise in jet fuel prices as a result of the conflict in the Middle East and other rising costs,” a spokesperson for the low-cost carrier said.
“All impacted passengers have been contacted directly, and most have been offered same-day travel.”
Qantas and rival Virgin Australia have already announced ticket price increases related to the jump in oil prices caused by the US-Israeli war on Iran which began on February 28. The war has driven up the price of oil and threatened supply for oil importers. The cost of aviation fuel has been hit hard.
Jetstar said it was adjusting flights on routes where there are multiple flights per day so that customers can fly as near to their original flight times as possible.
The airline said if a customer’s new flight time doesn’t suit them, they should go to Jetstar.com via chat to discuss their options. The flights being cut affect only travel between Australia and New Zealand and routes within New Zealand.
“We are sorry for the inconvenience and thank our customers for their understanding,” a spokesperson for Jetstar said.
Brent crude oil prices have been as high as $US120 per barrel this month but were around $US100 on Wednesday morning as optimism grew over Washington’s efforts to end the nearly month-long conflict.
Both Qantas and Virgin have announced a 5 per cent increase in ticket prices.
A host of airlines have begun to cut capacity in response to the price shock, which adds to airlines’ costs but also suppresses demand over time.
Air New Zealand and SAS have cut thousands of flights while United pulled 5 per cent of capacity for the northern summer.
United CEO Scott Kirby, speaking in Los Angeles, said airfares had gone up 15 to 20 per cent across the industry. The company has cut planned capacity in the next few months but with a plan to restore its full schedule in the northern autumn.
Kirby assumes oil prices will rise to $US175/barrel and won’t drop to $US100/barrel until the end of 2027.
“I’m also not betting the oil prices are going to go down,” said Kirby.
Based on the scenario, which Kirby described as “reasonable” and “definitely not the worst case”, problems for airlines will magnify.
While not discussing the fortunes of any particular airline besides United, Kirby said: “That’s a world where airlines that started in a marginal position have to make some really significant adjustments – if they can even continue to fly, in some cases.
“The bottom line is, supply has come out of the system if that happens, and it likely starts at the low end, and the carriers that were marginal to start [with] are the most likely to have to cut supply and cut it permanently.”
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Chris Zappone is a senior reporter covering aviation and business. He is former digital foreign editor.Connect via X, Facebook or email.
