The Qantas Group and Virgin Australia report substantial earnings despite increased fuel costs

Australia’s two largest airline groups have reported strong financial results despite facing significantly higher jet fuel prices, the ACCC’s latest Domestic Airline Competition in Australia report has found.

The Qantas Group reported underlying earnings before interest and tax of approximately $2.35 billion, down by 11 per cent from 2024-25. Virgin Australia reported underlying earnings of $753 million, up 13.4 per cent from the previous year.

These results came despite jet fuel prices remaining significantly higher than before the Middle East conflict. Jet fuel prices were nearly 50 per cent higher in late August 2026 than in February 2026.

“Despite significantly higher fuel costs, both the Qantas Group and Virgin Australia continued to generate substantial earnings in 2025-26,” ACCC Chair Gina Cass-Gottlieb said.

“These results highlight the financial resilience of the two largest operators in Australia’s highly concentrated domestic aviation market.”

Both airline groups’ strong financial performance was supported by resilient passenger demand, higher fares, capacity adjustments and arrangements that locked in some fuel costs in advance to reduce the short-term impact of higher costs. 

Airfares are higher and may increase further as passenger demand remains stable

Average domestic airfares were generally higher in recent months than a year earlier. Compared to the same month last year, average airfares were 3.5 per cent higher in May and 4 per cent in June, before moderating in July.

The two major airline groups expect fuel costs to remain elevated and have forecast further capacity reductions, as well as higher revenue from each seat they fly.

“With resilient demand and high load factors, the announced capacity reductions may place upward pressure on airfares, depending on airlines' commercial decisions and fuel prices,” Ms Cass-Gottlieb said.