Australia Faces Potential Flight Cancellations Amid Middle East Conflict
The ongoing conflict in the Middle East has raised concerns about flight cancellations in Australia, as airlines grapple with fuel shortages and soaring costs. Environment Minister Murray Watt recently highlighted the possibility of disruptions, stating that cancellations “can’t be ruled out” if the situation persists.
“We’ve already seen our domestic airlines make some changes around their flight routes. That’s obviously at least in part a response to the global fuel shortage that we’re seeing,” Watt said during an appearance on Sky News. He emphasized the need for a swift resolution to the conflict, particularly regarding the Strait of Hormuz, which is critical for global fuel supply chains.
“The longer this dispute goes on, the more difficult it will be for Australians and for everyone around the world in terms of meeting our fuel needs,” he added. The National Fuel Security Plan remains at level two, ensuring transport runs smoothly. However, if escalated to level three, fuel would be prioritized for essential industries such as farming, freight, and emergency services, with voluntary measures to limit fuel use introduced.
At level four, a national system would manage fuel distribution, ensuring key users are supplied first. This warning comes as Qantas and Virgin Australia both take steps to cut capacity and increase fares due to surging fuel costs linked to the conflict.
Virgin Australia has flagged fewer flights and higher fares across the second half of 2025–26 and into the next financial year. The airline noted that fuel supply remains secure in the short term but warned of sharply rising prices. “The price of jet fuel has been extremely volatile and has more than doubled since the end of February 2026,” it stated in a statement to the ASX.
Qantas announced similar measures, including fare increases, domestic capacity cuts, and changes to its international network. The airline expects to spend up to $3.3 billion on jet fuel in the first half of 2025–26, with price spikes linked to the Strait of Hormuz adding up to $800 million in costs.
As a result, Qantas and Jetstar will cut domestic capacity by about five per cent in May and June, with several routes already suspended, including Sydney to Busselton and services to Hamilton Island, Coffs Harbour, Mount Gambier, and the Gold Coast.
University of Sydney Business School professor Rico Merkert warned that airlines may be forced to make further cuts if fuel availability tightens. “Jet fuel availability will emerge as a serious constraint, potentially forcing airlines to cancel flights more broadly,” he told Daily Mail. “If they have to cancel international flights and pause or cull some unviable regional flights, they need to compensate that loss in cash flow somewhere.”
Prime Minister Anthony Albanese acknowledged the long-term effects of the war on Australians. “There is significant volatility, that’s clear,” he said during a speech in Sydney. “Fuel supply chains operate on long timeframes, often 30 days or more. Infrastructure damage, shipping bottlenecks, and regional instability all create risks. What we can control is our response, and that’s why we are doing everything possible to secure supply, work diplomatically to support de-escalation, and coordinate nationally.”
In Washington, President Donald Trump stated he was “highly unlikely” to renew a two-week ceasefire with Iran due to expire at midnight GMT on Wednesday (10am Thursday, Sydney time). “I’m not going to be rushed into making a bad deal,” Trump told Bloomberg News in a phone interview. After peace negotiations between American and Iranian negotiators collapsed a week ago, Trump declared the US Navy would stop “any and all” ships from entering or leaving the key trade route, which until recently carried around one-fifth of the world’s oil supplies.
It comes after Iran charged a toll for ships wanting to travel through the Strait of Hormuz. Trump has ordered the US Navy to find and intercept any vessel that has paid the toll. “No one who pays an illegal toll will have safe passage on the high seas,” he said.
