Qantas hikes fares due to rising fuel costs

QANTAS has announced it will again increase domestic, regional and Tasman air fares sold in Australia in response to rising jet fuel prices.


Increases of up to A$10 (US$10.2) per sector will apply to domestic and regional fares for tickets issued on or after March 31. Increases of up to eight per cent will also apply to Tasman fares.


Qantas CEO Alan Joyce said the increasing price of fuel is a major concern for the group as well as the global aviation industry. He said the airline will use hedging and fuel conservation to try to lower its fuel expenses.


"However the situation today is very different to the last fuel crisis, when the global economy was strong. This time, the world is still emerging from the global economic crisis, and demand is still recovering," said Mr Joyce.


"Since international fuel surcharges and domestic fares increased last month, jet fuel prices have increased by a further 15 per cent, to more than US$134 per barrel today.


"Even with favourable hedging in place, it is still at a much higher price than we can absorb. In spite of this hedging offset, fuel surcharges and fare increases, we will not be recovering the full impact of current and forecast fuel prices.


"Our ongoing response to this situation remains under review and we also cannot rule out further increases in surcharges and fares in the future," he said.


Qantas expects fuel costs for the group in the second half of this financial year to rise to AUD2 billion.


The statement from the airline said that year to date average prices for both Brent and Singapore jet fuel are at their highest since FY08 and at current prices, second half FY11 prices are forecast to be around 20 per cent higher than in the first half. The price of Singapore jet fuel has increased from an average of US$88 per barrel in September 2010, to US$120 per barrel in February, and is trading at more than US$134 per barrel at present.
(Source:http://www.schednet.com)