Qantas to Raise Airfares to Recover Lost Card Surcharge Revenue

Businesses accepting payments in Australia will no longer be allowed to add a card payment surcharge from 1 October 2026, and airlines are no exception.

Australian Frequent Flyer understands that Qantas is planning to raise airfares in October, once the 2026 Reserve Bank of Australia (RBA) changes take effect, rather than absorbing the cost of processing credit card payments.

A choice for businesses

Currently, many Australian businesses add a surcharge for accepting credit and debit card payments. Although the RBA currently caps the interchange fee at 0.8%, these surcharges are often higher than this amount. And they’re often poorly disclosed to customers.

From 1 October 2026, the RBA will lower the interchange fee cap for personal credit card transactions to 0.3%. It will also ban businesses from adding a surcharge for card payments. So, while businesses will see reduced costs for processing card transactions, they will no longer be able to pass any of this cost on to customers.

Businesses that currently surcharge face two basic choices: absorb the cost of processing card payments, or recover this cost by increasing prices across the board (regardless of whether a customer pays using a card or cash).

Airlines will probably increase base fares

Given the low margins with which airlines operate, and the ongoing high cost of fuel, it’s not surprising that airlines are likely to respond by simply raising fares. We understand that Qantas plans to do this. Jetstar (which is owned by Qantas), as well as Virgin Australia and Rex, are likely to do the same.

I would personally expect to see airfares increase by around 1-2% across the board in October. However, if you currently pay by credit card anyway, the removal of a card payment surcharge will offset this. So, the net impact for most customers should be limited or neutral. Those currently using fee-free payment options such as BPAY will pay more, however.

Currently, Rex also charges a 1% “Booking/Handling Fee” for booking a flight on its website. While this is not technically a card payment surcharge, I would hope that Rex will also remove this ridiculous fee that can only be avoided by buying a ticket in person at an airport check-in counter.

It’s not yet clear whether Australian airlines will also remove the card payment surcharge that currently applies to tickets purchased outside of Australia, including in markets such as New Zealand. I suspect they won’t, unless legally required to.

Impact on points-earning credit cards

As we get closer to October 2026, the impact of the upcoming RBA changes on Australian credit cards is starting to become clearer.

With interchange fees on personal credit cards dropping by around 40%, banks will have reduced margins to pass on benefits to cardholders such as frequent flyer points.

As a result, we can likely expect to see banks reducing sign-up bonus point offers for new cardholders in the coming months. We could also expect banks to introduce or lower existing monthly caps on the amount of reward points cardholders can earn at the full rate each month.

So, if you’ve been thinking about applying for a new credit card with a solid sign-up bonus, now is probably a good time. 😉