Qantas stands firm on fuel surcharge

Qantas stands firm on fuel surcharge

Qantas appears unlikely to make more reductions in its fuel surcharges on tickets despite the slide in world oil prices.

Qantas in January cut fuel surcharges on its international tickets in a move that saves frequent flyers money, but did not lower airfares.

Instead the airline restructured its prices so that base fares were increased to compensate for the lower fuel charge.

Chief executive Alan Joyce says Qantas’ first half profit was boosted by a $33 million benefit from lower fuel prices thanks to the slide in oil prices, and more savings were expected.

But he said fuel prices remained volatile.

He also noted that international airfares had dropped 30 per cent and domestic by 20 per cent in the past decade.

“So the consumer has never had it better,” he told reporters on Thursday as Qantas reported it had swung back into profit.

Under the changes to its fuel surcharges, Qantas passengers would only save if they booked tickets with frequent flyer points.

The decision to keep total fares prices the same contrasts with Virgin Australia’s announcement that it would reduce economy ticket prices to the US by $40 after moving to include fuel surcharges into the base fare.

Qantas’ interim net profit was $203 million, while its underlying profit was $367 million, its best first-half performance since 2010 and an improvement of $619 million compared to the same time last year.

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