Qantas increases fuel surcharge by up to 50 per cent

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This was published 13 years ago

Qantas increases fuel surcharge by up to 50 per cent

Qantas says rising oil and jet fuel prices have forced the carrier to hike its fuel surcharge by more than 50 per cent for some international tickets.

Australia's largest carrier said on Thursday the fuel surcharge for one-way tickets booked on or after February 19 for destinations in the UK and Europe would increase to $145, up 53 per cent from the current $95.

Flights to mainland USA, Canada, South America, South Africa and India would attract a $115 fuel surcharge, compared with $85 now.

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And travellers headed to Asian and Pacific destinations, including Honolulu, will face a $75 fuel surcharge, which is $20 more than what is being charged at the moment.

The airline said in a statement fuel surcharges for domestic and Tasman fares were under review.

Qantas chief executive Alan Joyce said the increase in the fuel surcharge would "not fully cover" the additional cost and the airline could not rule out further changes in the future.

Mr Joyce said the price of Singapore jet fuel had risen from an average of $US88 a barrel in September 2010 to $US110 a barrel in January 2011 and was trading at $US117 a barrel on Thursday.

"Based on industry forecasts, and our own assessment, prices will, at the very least, remain at their current higher levels," Mr Joyce said in a statement.

"Qantas has been closely monitoring the situation for some time now and has held off any move on surcharges for as long as possible."

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Qantas said its wholly-owned low-cost subsidiary Jetstar would not reintroduce fuel surcharges on its tickets.

"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," Qantas said.

Qantas said it 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.

"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," Mr Joyce said.

AAP

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