Airlines hike surcharges

BANGKOK, 20 April 2011 — Qantas will increase fuel surcharges, 28 April, on all routes saying it is a response to escalating jet fuel prices.

The latest change will apply to all tickets issued on or after 28 April the airline said in a statement Tuesday.

This is the third time this year that the carrier has increased its fuel surcharge after adjustments 19 February and 17 March.

The fuel surcharge on long-haul routes will add US$100 each way on the cost of a ticket. Fare surcharges to European destinations will increase from AUS$190 to AUS$290 each way, while surcharges on US and Canadian routes will rise from AUS$150 to AUS$250 each way.

The airline’s fuel surcharge for European and North American flights has roughly tripled since the start of the year.

Surcharges for sector fares to South America, South Africa and India will rise by AUS$50, to AUS$200 each way.

Domestic and trans-Tasman fares will rise by 5%.

Qantas will increase the fuel surcharge on domestic flights redemptions using frequent flyer points by AUS$10 on domestic flights and by AUS$20 on trans-Tasman flights.

According to the airline’s press release, Qantas Chief Executive Officer, Alan Joyce, said even after fuel hedging, fuel surcharges and fare increases, Qantas could not fully recover these higher fuel costs.

“The revised fuel surcharges cover less than half of the increase in fuel cost for Qantas International business for next year. With fuel prices at record highs, even if the fuel price begins to decrease it will be some time before we will be able to decrease the fuel surcharge,” he warned.

Year to date average prices for both Brent and Singapore Jet Fuel are at their highest since FY08. The price of Singapore Jet Fuel has increased from an average of US$88 a barrel in September 2010, to US$120 a barrel in February, and is more than US$136 per barrel today.

Starting this week, 18 April, Thai Airways International increased its fuel surcharge on international routes, also the third time this year. The first time was on 17 February and the second on 18 March.

The increased amount varies depending on distance, ranging from US$5.5 to US$38 per sector.

Travellers will not be happy to fork out even higher fuel surcharges, knowing that for an airline the size of Qantas the highest cost is its payroll not its fuel bill. A sizeable part of the pay roll goes to maintain top a heavy management that continues to pay to itself huge salary increases and fringe benefits.