Soaring jet fuel prices create headwind for Western Sydney International Airport

Transport Minister Catherine King said her office was monitoring how airlines were coping with the escalating costs.

"Every airline is grappling with that at the moment," King told this masthead. "Obviously, the Middle Eastern airlines in particular, huge booming hubs suddenly almost stopping overnight and then restarting and then stopping again." "That is creating a lot of pressure on aviation across the board at the moment and so we always keep an eye on all of that," she said.

The price of oil and jet fuel has skyrocketed since the US and Israel began a war against Iran in February, driving up aviation costs even as demand for travel remains strong. In early February, Brent crude cost $US73 a barrel, now, it is trading at $US113 ($161). Benchmark Singapore jet kerosene spiked to an all-time peak above $US240 per barrel in March and today trades around $US175.

Qatar Airways recently committed to flying three return trips to WSI a week beginning next year. The Doha-based airline, a partner to Virgin, used to fly 170,000 passengers globally a day before the war erupted; that figure has now settled to about 145,000, and its destinations have fallen from 180 to 170.

Qantas has stopped flying its A380s between Melbourne and Los Angeles and is now using the smaller Boeing 787 fleet. Virgin said it planned for domestic capacity to fall by 3 per cent in the first half of 2027, similar to the Qantas Group. Qantas said it continues "to make adjustments to capacity in response to increasing costs, including fuel." Capacity across airlines in the Asia-Pacific region declined for the fourth month in a row in September, according to International Air Transportation Association numbers, and airlines in the region cut 387,000 seats in the week to October 19. Europe shed nearly 1.6 million seats and North America 758,000, according to data from the Centre for Aviation and OAG.

Michael Galvin, director at AvLaw Aviation Consulting, said airlines cutting routes now can be a "very astute move." "It’s an opportunity for airlines to review their, their route planning, their networks, to ensure they’ve got the most efficient aircraft operating in the highest revenue sectors. Routes that may have been marginal, for some time that have been subsidised by more profitable routes, are really being examined closely and capacity reduced on some of those routes." He said it may be a difficult time to attract new entrants to WSI, with airlines adopting a "little bit of wait and see" approach.

One advantage WSI has, Galvin said, is that being government-owned, it does not have the same impetus to make "massive profits" from the start. "It’s not the same as if it was owned by the big superannuation funds that own most of the other airports."

Currently, the airport has four round-trip flights a day. Next month Singapore Airlines will begin flying one daily return flight to Singapore Changi. Low-cost carrier VietJet has also committed to WSI. Recent legal rulings in the UK have resulted in an asset freeze expected to delay the rollout of a VietJet-backed domestic airline named Cherrie Air.

King said: "We obviously keep an eye on all of the players across the aviation market, but we would really like to see them here and to be successful here at Western Sydney, and they’ve made that commitment and we’re looking forward to having them here."