Qantas flags fare hike due to rising global fuel prices
Rising costs of oil and jet fuel in the world market pushed Qantas Airways Ltd to increase its fuel surcharge by more than 50 percent, which the national carrier said would applied on specific international flights.
However, the airline said on Thursday that the fuel surcharge hike will not affect its budget fare subsidiary, Jetstar, though Qantas pointed out that "Jetstar will address the impact of higher fuel prices via adjustments to air fares in selected markets and increases in ancillary revenue, including baggage charges."
According to its released statement, Qantas flights booked by February 19 will be affected by the price movement and one-way ticket prices bound for UK and Europe would jump by 53 percent from $95 to $145.
Also, flights going to major North American, South American, South African and Indian destinations would be charged higher from $85 to $115 while Qantas flights servicing the Asia-Pacific regions would surge from $55 to $75.
No fare adjustments have yet to be announced on the domestic front but Qantas said that such possibility is undergoing review and serious consideration.
Qantas chief executive Alan Joyce revealed that the new fare hike would not be able to compensate for the additional costs brought by higher fuel prices on its operations and any price movement has not been discounted to cover for the rising costs.
Joyce added that fare hike movements in the airline industry will basically address the present high levels of global oil prices, which he said are projected to remain at their current levels basing on latest industry forecasts.
As of today, Singapore jet fuel is trading at $US117 per barrel and Joyce said that Qantas "had hedged 66 per cent of its remaining fuel requirement for 2010/11 at a worst-case crude oil price of $US93.06 a barrel, including option premium."
Joyce also cited that "year-to-date average prices for both West Texas Intermediate Crude Oil and Singapore Jet Fuel are at their highest since FY08, and second half FY11 prices are forecast to be around 20 per cent higher than in the first half."