Qantas, Flight Centre flag hefty airfare increase due to jet fuel price hike

Brisbane, Australia - September 25, 2014: looking through window at Brisbane airport, tails of Qantas planes parked on tarmac with no people.

Qantas CEO Alan Joyce warned that airlines could hike airfare prices by 7 per cent in response to the rising price of jet fuel, while Graham Turner, the boss of Flight Centre, predicted airfares to rise by 15 per cent.

The rising oil prices come due to the Russian invasion of Ukraine leaving jet fuel at over $USD120 ($AUD164) per barrel.

Joyce spoke at the AFR Business Summit on Tuesday, where he announced a hedging strategy for fuel that could buy the airline time but would not spare it from price increases.

“Unfortunately if we stay at these levels, airfares are going to have to go up, we’re going to have to pass them on. But to put it in context, at these levels, around $US120 a barrel, it’s about 7 per cent,” Joyce said.

“It’s not massive but it will have an impact on some levels of travel out there. If it moves further, for every $US4 on the barrel, it’s another per cent that airfares have to improve by.”

According to The Australian, Joyce claimed that any price increases that Qantas imposed would be a fraction of its competitors. He said Qantas’ competitors were more exposed to fluctuations in fuel prices.

“None of the American airlines hedge. So that means that they are completely exposed to it now,” he said.

“A lot of the Asia carriers have a lot lower level of hedging. And we think a lot of our domestic carriers don’t have hedging.

“So the imperative for them to move is a lot bigger than the imperative that we have to move.”

Turner’s claim that flight prices would increase by up to 15 per cent is because fuel costs make up between 30 and 45 per cent of an airline’s overall costs.

“Overall ticket prices could rise between 10 and 15 percent,” said Turner.

“The airlines will feel it more when their fuel hedging comes to an end later this year.”

Turner spoke at the QUT Business Leaders Forum on Tuesday and said he did not see the airfare increase scrimping demand for travel as the world comes out of the pandemic.

Weighing in on the flight price hike discussion was the Australian Competition & Consumer Commission (ACCC) chairman Rod Sims, who said fuel accounts for 25 per cent of airline expenditure.

“I’m concerned for consumers and concerned for the health of the airlines and getting consumers back in the air,” Sims said.

“When it’s 25 per cent of your costs and it’s going up through the roof, it matters.”

According the AFR, the increase in oil price is expected to continue rising and Royal Bank of Canada commodity analyst said it is not “unfathomable” that oil prices could reach as much as $USD200 ($AUD273.49) per barrel.

The Russian invasion of Ukraine has had massive impacts on international travel worldwide.

Many airline’s have changed their routes to avoid flying over Russia, including Qantas, Russian airline’s have been asked to return planes they lease, and Russian planes have been barred from EU airspace.

Latest News

  • Cruise

Seabourn introduces enhanced groups programs for travel advisors

Leading ultra-luxury cruising and expedition travel company, Seabourne, proudly announces the “Seabourn Enhanced Groups Program” to elevate business prospects for travel advisors. This program introduces a revamped Tour Conductor Credit that offers shipboard credits or bonus commission for bookings. It also eliminates the need for deposits for small group allotments and increases group capacity. “Seabourn […]

  • Cruise

MSC World America to become the ultimate family destination at sea

MSC Cruises’ latest world-class ship is set to redefine family cruising with unprecedented spaces and activities, including ones developed in partnership with the LEGO® group. The cruise line announced that its new flagship will feature seven distinct districts, each bringing together a range of tailored experiences. The ship’s blend of American comfort and European design […]

  • Cruise

Ponant’s latest luxury cruise expeditions for 2024 and 2025

Head out to see the beauty of unique destinations on three bucket-list explorations of Australia with Ponant Cruise’s new luxury expeditions. Known for their luxury cruises, Ponant offers unique and truly exceptional sea voyage aboard sleek and intimately sized cruise yachts. They offer a range of discovery expeditions, and launched new cruises that take guests […]

  • News

Liz Anderson steps down from CATO Board after eight years of leadership

The Council of Australian Tour Operators (CATO) has today announced that Liz Anderson (at right) will be stepping down from the Board on Wednesday June 19, concluding her eight years as a director. “The eight years that Liz served on the CATO board were the most transformative time in the Association’s history,” CATO Chair Dennis […]

  • Attractions

Comedian Josh Thomas road tests swapping day job for Tassie odd jobs

Australians are invited to tap into a 200-million-day annual leave bank* and swap day jobs for one of 10 ‘Odd Jobs’ in Tasmania this off-season including Wombat Walker, Paranormal Investigator, Wine Whisperer and Truffler Snuffler. Tourism Tasmania has today launched Odd Jobs, a tongue-in-cheek campaign designed to encourage Australians to swap their day jobs for […]

  • Aviation
  • News

Christine O’Reilly to replace Peter Hay as chair of Australia Pacific Airports Corporation

Christine O’Reilly has been named as the new chair of Australia Pacific Airports Corporation (APAC) – the owner of Melbourne and Launceston Airports. According to a release, O’Reilly will replace Peter Hay on 1 October, who retires after five years as Chair of APAC. APAC CEO Lorie Argus said O’Reilly’s appointment comes at an exciting […]

  • Tourism

The number one thing you can’t forget if you’re going to Europe & The Olympics

As the Summer Olympics in Paris draws near, travel insurance comparison site Compare the Market is urging travellers to safeguard their European summer sports dreams by getting travel insurance for when the unexpected happens. While France seems like a decently safe country to visit, it’s crucial not to overlook the potential risks that could disrupt a holiday. From bed […]

  • Destinations
  • Partner Content

The Solomon Islands’ is ‘Kulture-plus’

Be grateful that your experience of 'headhunting' is limited to some random dude reaching out to you on LinkedIn.

Partner Content

by Travel Weekly

Travel Weekly
  • Cruise

Cruise Traveller’s new Scottish Highlands cruise tour package

Australian small ship cruising specialist, Cruise Traveller, offers a 20-night land and sea holiday in the UK aboard the Lord of the Glens. The tiny cruise line’s 52-guest boutique vessel, Lord of the Glens, is purpose-built to explore the intricate waterways and lochs of the Scottish Highlands. It boasts a rich, traditional ambience with polished […]

  • Cruise

Celebrity Xcel’s keel-laying ceremony in France, with 2025 inaugural sail planned

Construction has commenced on Celebrity Cruises’ next ship, Celebrity Xcel, with a keel-laying ceremony at the Chantiers de l’Atlantique shipyard in Saint-Nazaire, France. An Edge Series ship, Celebrity Xcel will set sail in autumn 2025, with several new yet-to-be-revealed offerings. At the ceremony, Jason Liberty, president and CEO of Royal Caribbean Group (RCG), the parent […]

  • Destinations
  • Tour Operators

Globus unveils nine new independent tours for 2025

Coach touring brand Globus has unveiled nine new independent tours for 2025, from Bangkok to Bali and Abu Dhabi to Nepal. “With Globus Independent tours, our guests are free to enjoy the many benefits of touring, untethered and unscheduled,” APAC head of marketing, Globus family of brands (GFOB), Chris Fundell said. “Providing hand-picked hotel accommodations, […]

  • Hotels

Mandarin Oriental Hotel Group opens Mandarin Oriental Mayfair

The Mandarin Oriental has opened a second property in London, the Mandarin Oriental Mayfair, in the heart of historic Hanover Square. Designed by internationally renowned Rogers Stirk Harbour and Partners, the hotel is the first new build in Mayfair in over a decade. Bringing a modern architectural approach to one of London’s most storied squares, […]