Fuel, carbon force Qantas price hike

Fuel, carbon force Qantas price hike
By admin

Qantas will raise fares, increase fuel levies and introduce a carbon fee this month as it tackles rising costs.

In a series of measures announced by the airline, domestic fares on Qantas and QantasLink will increase by an average 2.5% from February 9 as a result of spiralling fuel costs.
The carrier also will raise its fuel surcharge on a one-way trip to London and Frankfurt by $60 from February 15, taking the cost to $350, while from the same date flights to Europe will incur a $3.50 carbon fee.
The latter charge is the result of the European Union emissions scheme that came into effect on January 1.
Qantas said the scheme, which forces airlines to pay a proportion of the carbon emissions generated by their flights, will wipe $2.3 million from its bottom line.
In addition, Qantas will introduce a sliding scale of charges for domestic flights based on the distance flown – ranging from $1.82 to $6.86 – to offset the Australian carbon tax that comes into force in July. These fees will also be payable from February 15 but only for travel after July 1.
All Jetstar lead in fares will rise by $10 to combat higher fuel costs and the carbon tax.
Meanwhile, all international fuel levies will increase.
In addition to the $60 added to London and Frankfurt flights, $20 will be added to one way fares to Asia and Honolulu, taking the levy to $165, while fuel surcharges to South America and South Africa will increase from $200 to $240 one way.
Flights to the US will incur a $310 one way fuel levy, a $60 increase.
“The Qantas Group’s jet fuel cost for the six months to December 31 was $2.2 billion, an increase of around $450 million compared with the previous year,” the airline said. “Average year to date fuel prices are at their highest level since 2007/08.
“While fuel surcharges, price increases and hedging are being used to mitigate the impact of fuel prices, they will not fully recover the cost impact.”
Qantas has hedged 86% of its remaining fuel needs in 2011/12 at a worst case crude oil price of US$121 per barrel.

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