News: QAN UPDATE 1-Australia's Qantas fine-tunes capacity as demand jumps, fuel prices surge

(Adds shares, capacity details)

May 26 (Reuters) - Australia's Qantas Airways (QAN) signalled changes to domestic capacity and fares on Thursday to counter surging fuel prices, saying that it expected strong demand for air travel, sending its shares up nearly 3%.

The Australian flag carrier lowered domestic flying levels for July and August from 107% of pre-COVID-19 levels to 103% but it did not provide further clarity on fares, adding that the adjustments were not expected to materially impact customers.

"In practical terms, these changes will generally lead to a higher seat factor on flights across the Group," Qantas said in a statement.

The airline said its international operations were seeing continued demand heading on to the northern summer period, as more governments remove pandemic-imposed travel restrictions.

International capacity climbed to over 70% of pre-pandemic levels by the end of the first quarter of fiscal year 2023, compared with 50% at the end of the previous quarter, Qantas said.