Australia’s major domestic airlines have defended recent reductions in regional flight services, attributing the cuts to soaring operational costs and insufficient passenger demand. The airlines cited a sharp rise in jet fuel prices, which have surged by up to 140 percent since the outbreak of conflict in the Middle East, as a primary factor undermining the financial viability of several regional routes.

Qantas, Virgin Australia, and Jetstar have suspended services on routes including Gold Coast-Darwin, Adelaide-Mount Gambier, Adelaide-Cairns, and Launceston-Perth. Similarly, Regional Express (Rex) has discontinued flights such as Melbourne-Devonport, King Island-Burnie, Sydney-Orange, and Sydney-Port Macquarie, also pointing to weak demand and escalating fuel costs.

Executives from the major airlines appeared before a Senate committee last Friday to address the challenges facing aviation, particularly in maintaining reliable and affordable services for rural, regional, and remote communities. Virgin Australia’s chief customer officer, Andrew Cleary, highlighted that “airline inflation” is running at twice the rate of general inflation when excluding fuel price increases. He emphasized that prolonged high jet fuel costs have made some regional routes unsustainable, including Uluru-Brisbane and Uluru-Melbourne, which the airline would have otherwise supported.

“It’s not a temporary spike,” Cleary said, stressing that industry experts do not expect jet fuel prices to normalize soon. Qantas Domestic chief executive Markus Svensson echoed this outlook, noting that the airline generally favors launching new routes rather than cutting existing ones. However, he pointed to the higher operating costs associated with regional services, intensified by factors such as aircraft type and airport fees. For example, maintenance on a Q400 aircraft can be twice as expensive as on a Boeing 737, and government, airport, and security charges constitute a significant portion of the typical $197 fare, often exceeding $90 before accounting for fuel, crew, or maintenance expenses.

The airlines also confronted criticism over Qantas’ closure of three regional bases earlier this year, which affected more than 70 staff members. Mark Dal Pra, chief executive of QantasLink, explained that 31 pilots and cabin crew opted to remain in their original regions, commuting to major cities for work, while 33 relocated and seven left the airline entirely.

Both Cleary and Svensson emphasized that routes are carefully analyzed to ensure they meet demand or have a reasonable expectation of stimulating it. Cleary added that there is a natural limit to demand on regional routes that cannot always be offset by low airfares. “We’re not building a network based on hopes and dreams; we’re focused on sustainability,” he said.

The airline representatives urged the government to support regional aviation by limiting taxes and charges and implementing a dispute resolution framework for airport negotiations. Cleary noted that airports are planning significant price increases, some up to 50 percent over the next five years, tied to infrastructure investments that airlines consider poorly timed or excessively costly. He argued such a mechanism would help redress the current imbalance of power between airlines and airports, facilitating fairer arrangements and helping preserve regional air connectivity.