Qantas slashes SA domestic flights, skyrocketing fuel costs crush SA exporter
Australia’s top airline is slashing domestic routes sparking concerns over SA regions missing out on vital care. One SA exporter is already left with a sour taste over air freight.
As Qantas says rising fuel costs have given its bottom line an up to $800 million hit with domestic routes now in its sights. One leading South Australian business is experiencing its own pain as the price of exporting more than doubles “if you can even get the container to the region”.
The airline will slash a key South Australian regional route – Mount Gambier to Adelaide – from Sunday, 17 May, Qantas saying, “a number of South Australian routes are impacted, as are all states and territories”.
“We know this is frustrating for customers and the local community and sincerely apologise for any inconvenience caused,” QantasLink CEO Mark Dal Pra said.
“While the recent increase in fuel prices is making the situation more difficult, the previous decline in demand means the route is simply no longer viable for us to continue operating.
“We’ve tried to boost demand by adjusting schedules, working with the local Council, and offering multiple sales, however demand is well below sustainable levels.
“Impacted customers will be contacted directly and offered a refund.”
The airline noted it first launched Adelaide t0 Mount Gambier flights in March 2021 and tried a number of different schedules and multiple sales to try and stimulate demand.
In its market update, Australia’s leading national carrier warned jet fuel prices have more than doubled over the year, and it expected to pay between $3.1 billion and $3.3 billion on fuel in just the second half of the financial year alone.
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While the airline said in a statement that it was still seeing “strong demand for international travel to Europe as customers seek alternative routes” it planned to reduce domestic routes.
Given the volatility in fuel prices, Qantas has already reduced its domestic capacity in the fourth quarter of 2026 by five percentage points, with affected customers offered alternative flights or a refund.
Despite not operating in the Middle East, Qantas also warned there would be fare increases and international network changes due to the ongoing war in the region.
Australian Medical Association SA president Associate Professor Peter Subramaniam immediately raised fears that losing the Adelaide to Mount Gambier route could reduce access for regional residents needing vital health care.
“Although Rex is still operating, fewer air travel options will make it harder for patients to travel for essential care and far more difficult for visiting specialists to provide services on the ground in Mount Gambier,” he said.
South Australian Business Chamber CEO Andrew Kay warned the announcement would “create both uncertainty and additional cost pressures for SA businesses”.
“Understanding where the five per cent of cuts will be made is important as smaller markets like Adelaide might wear a greater proportion of cancelled flights compared to the busier routes on the eastern seaboard,” he said.
“The cost spikes will be unavoidable for FIFO operations where the travel is essential and businesses in regional centres.
“While we are moving out of our peak tourism period, the uncertainty will still impact forward bookings for the busy conference market and tourism activity in general.”
An Adelaide Airport spokesperson said: “While Adelaide Airport’s passenger numbers and demand for travel have been strong over Gather Round and school holidays, we are working closely with all airlines on the impacts to route economics of fuel price and the unavailability of Middle East airspace”.
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Local exporter and chief operating officer at The Yoghurt Shop Brandon Reynolds said the war had already meant a key market for his product has “come to a bit of a standstill”.
The South Australian yoghurt brand spent half a million dollars over the past three years establishing exports to the Middle East, with the United Arab Emirates a standout market for the company before war in the Middle East broke out.
Reynolds said the cost of air freight has grown from $4 per kilogram to $9.50 per kilogram to get to Dubai: “our largest export market”.
“That’s if we can get it there,” said Reynolds, an InDaily 40 Under 40 alumnus.
“We’re lucky that our partners in that region own the food supply chain businesses there and they’re taking the brunt of it,” he said.
“But there’s no doubt that it’s not sustainable to be sending product to that part of the world the way we are.
“This will massively diminish some of the small- to medium-sized exporters who have spent a lot of time investing in that part of the world and just can’t get product there.”
He said that business in the region had dried up, which is “really unfortunate because it’s not that we’re missing out on sales, there’s no food. They don’t just rely on food from us”.
Before the war, The Yoghurt Shop would send 40,000 units of yoghurt to the Middle East “and they’d all be bought two weeks later”.
“Now, we haven’t been able to send anything like that to the region for the past six weeks,” he said.
China was emerging as a “really stable market” for the company, “which just seems extraordinary to say nowadays”.
“We’re not only trying to export to the region, but looking at how we can establish a permanent presence there,” Reynolds said.
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