QANTAS to double fuel surcharge
Apr 7th 2005, 4:54 am
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QANTAS to double fuel surcharge
http://www.theage.com.au/news/Nation...489559104.html
Qantas likely to double fuel surcharge
By Bridie Smith
Consumer affaris reporter
April 7, 2005
Qantas is likely to almost double its fuel surcharge, with other airlines expected to follow as the crude oil price continues to soar to record highs.
If Qantas doubles its fuel surcharge - the third increase since it was introduced last May - the cost of a domestic return trip would jump by $48 per sector. If flying two sectors, say flying from Melbourne to Cairns via Brisbane, the surcharge could double again.
For international travellers flying return to London or New York, a trip which currently crosses four sectors, the surcharge will add up to $232.
The news comes after Air New Zealand announced yesterday it would increase its surcharge from next Tuesday because of the increasing cost of aviation fuel.
A Qantas spokeswoman said the review was a reaction to volatile jet fuel prices, which were at record highs.
"Qantas has been reviewing its current fuel surcharges and is considering an increase," the spokeswoman said.
"It is inevitable that the surcharge will go up and we are looking at that at the moment and are making calculations."
Qantas is expected to make an announcement about the size of the increase by the end of the week. The airline last increased its fuel surcharge in October last year, taking the domestic rate to $12 per sector and $29 per sector for international travellers. The charge is up from $6 and $15 when the surcharge was introduced in May last year.
However, despite the anticipated jump, Qantas said the price increase was unlikely to cover the increasing cost of fuel, which is expected to blow out by an additional $1 billion next financial year. Fuel is the third largest operational cost for the airline after staff wages and aircraft costs.
The changes will also apply to its cut-price offshoot Jetstar.
A Virgin Blue spokeswoman said the budget airline was watching the price of jet fuel, which is hovering around $US74 ($A96) a barrel.
"Virgin Blue is closely monitoring the situation and is clearly concerned, along with all other airlines globally, about the rising cost in jet fuel," a spokeswoman said. "But we have yet to make a decision regarding an increase in the fuel surcharge."
Virgin Blue last adjusted its surcharge in September, when the domestic surcharge went from $6 to $10 and the international doubled to $20.
The Air New Zealand surcharge increase announced yesterday only applies to tickets sold in New Zealand.
Group general manager (marketing, network and sales) Norm Thompson said the cost of Singapore jet fuel was now 80 per cent higher than in April last year, and around 15 per cent higher than when the surcharge was last increased in October.
"Jet fuel represents around 20 per cent of Air New Zealand's operating costs, so any sustained upward movement has an impact on the cost of travel," he said.
British Airways, Thai Airways, Swiss International Airlines and Virgin Atlantic have all announced fuel surcharge increases in the past fortnight.
Qantas likely to double fuel surcharge
By Bridie Smith
Consumer affaris reporter
April 7, 2005
Qantas is likely to almost double its fuel surcharge, with other airlines expected to follow as the crude oil price continues to soar to record highs.
If Qantas doubles its fuel surcharge - the third increase since it was introduced last May - the cost of a domestic return trip would jump by $48 per sector. If flying two sectors, say flying from Melbourne to Cairns via Brisbane, the surcharge could double again.
For international travellers flying return to London or New York, a trip which currently crosses four sectors, the surcharge will add up to $232.
The news comes after Air New Zealand announced yesterday it would increase its surcharge from next Tuesday because of the increasing cost of aviation fuel.
A Qantas spokeswoman said the review was a reaction to volatile jet fuel prices, which were at record highs.
"Qantas has been reviewing its current fuel surcharges and is considering an increase," the spokeswoman said.
"It is inevitable that the surcharge will go up and we are looking at that at the moment and are making calculations."
Qantas is expected to make an announcement about the size of the increase by the end of the week. The airline last increased its fuel surcharge in October last year, taking the domestic rate to $12 per sector and $29 per sector for international travellers. The charge is up from $6 and $15 when the surcharge was introduced in May last year.
However, despite the anticipated jump, Qantas said the price increase was unlikely to cover the increasing cost of fuel, which is expected to blow out by an additional $1 billion next financial year. Fuel is the third largest operational cost for the airline after staff wages and aircraft costs.
The changes will also apply to its cut-price offshoot Jetstar.
A Virgin Blue spokeswoman said the budget airline was watching the price of jet fuel, which is hovering around $US74 ($A96) a barrel.
"Virgin Blue is closely monitoring the situation and is clearly concerned, along with all other airlines globally, about the rising cost in jet fuel," a spokeswoman said. "But we have yet to make a decision regarding an increase in the fuel surcharge."
Virgin Blue last adjusted its surcharge in September, when the domestic surcharge went from $6 to $10 and the international doubled to $20.
The Air New Zealand surcharge increase announced yesterday only applies to tickets sold in New Zealand.
Group general manager (marketing, network and sales) Norm Thompson said the cost of Singapore jet fuel was now 80 per cent higher than in April last year, and around 15 per cent higher than when the surcharge was last increased in October.
"Jet fuel represents around 20 per cent of Air New Zealand's operating costs, so any sustained upward movement has an impact on the cost of travel," he said.
British Airways, Thai Airways, Swiss International Airlines and Virgin Atlantic have all announced fuel surcharge increases in the past fortnight.
