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Qantas increases airfares again to offset fuel costs

24-Mar-2011 9:32 AM

Qantas announced (24-Mar-2011) it would increase domestic, regional and trans-Tasman fares sold in Australia in response to increasing oil and jet fuel prices. The move is Qantas' third fare/fuel surcharge increase in recent weeks aimed at offsetting high jet fuel prices. Qantas stated increases of up to AUD10 (USD10) per sector will apply to domestic and regional fares and 8% fare increases will be applied to trans-Tasman airfares for tickets issued on or after 31-Mar-2011. The airline expects its fuel bill to increase AUD2 billion in FY2011.

Qantas: “The increasing price of fuel is a major concern for the Qantas Group and the global aviation industry. Airlines have a range of options available to them to manage this significant cost, and Qantas is among the best in terms of using mechanisms such as hedging and fuel conservation. However the situation today is very different to the last fuel crisis, when the global economy was strong. This time, the world is still emerging from the Global Economic Crisis, and demand is still recovering. Since international fuel surcharges and domestic fares increased last month, jet fuel prices have increased by a further 15%, to more than USD134 per barrel today. Even with favourable hedging in place, it is still at a much higher price than we can absorb. In spite of this hedging offset, fuel surcharges and fare increases, we will not be recovering the full impact of current and forecast fuel prices. Our ongoing response to this situation remains under review and we also cannot rule out further increases in surcharges and fares in the future.” Alan Joyce, CEO. Source: Qantas, 24-Mar-2011. [more]