Fuel costs see Sharp Airlines, Qantas cut capacity in Oz

Tasmanian regional carrier Sharp Airlines (SH, Hamilton, VI) is temporarily cutting services to King Island and Flinders Island citing the sharp rise in fuel costs.

Managing Director Malcolm Sharp told the Australian Broadcasting Corporation (ABC News) that the carrier had opted to reduce flights rather than passing the cost on to travellers. "The easiest thing to do would be to put prices up, but we think that would have an adverse impact on demand," he said.

Sharp was not immediately available for comment.

At the end of May 2022, he had still been confident that schedule disruptions due to the pandemic had been a thing of the past and had announced the resumption of Sharp Airlines' core winter schedules until September 30, 2022.

Still, with soaring aviation fuel increases in the past two months, the airline will suspend its Saturday services from Launceston and Burnie to King and Flinders Islands from the end of July until the middle of September. Melbourne Essendon to King Island services on Wednesday mornings would also be suspended until demand increased. He did not expect the changes to have a significant impact as passengers could still travel on alternative days.

Sharp said all other services from Hobart International, Launceston, Burnie, and Essendon to and from the islands would be retained.

Sharp Airline's move follows a similar one by Qantas (QF, Sydney Kingsford Smith), which announced it was adjusting its domestic capacity levels for much of FY2023 to assist with sustained high fuel prices recovery. The airline has cut 5% of its capacity in July and August, on top of the 10% already announced in May. This total of 15% would also apply in September. A cut of 10% would further apply to schedules from October until the end of March 2023. This brought the Group's planned domestic flying down to 106% of pre-COVID levels for the second quarter of FY2023 and 110% for the third quarter. Qantas equally believes the impact on passengers will be negligible as the suspended services are mostly on high-frequency routes.