Sydney, 2 February (Argus) — Australian airline Qantas will raise fuel surcharges from next week on its domestic flights, and from 15 February on international flights, because of higher fuel costs and the introduction of new carbon charges.
Fuel surcharges on flights to Asia will rise by A$20 ($18.70) to A$165 on a one-way ticket, by A$40 to A$240 on a one-way ticket to South America and South Africa and by A$60 to A$310 and A$350 on a one-way ticket to the US and Europe respectively. Domestic fuel surcharges will increase by A$5 to A$122 on a one-way flight between Australia's two largest cities Sydney and Melbourne.
Jet fuel is the airline's largest operational cost with fuel costs rising by about A$450mn to A$2.2bn in the six months to 31 December 2011. This was the highest average jet fuel price since the financial year ending 30 June 2008, Qantas said. The airline manages fuel costs through fuel hedging, with 86pc of its fuel requirements in the financial year to 30 June 2012 hedged at a worst-case crude price of $121/bl.
Qantas faces paying about A$2.3mn in allowances under the EU's aviation emissions trading scheme requiring airlines from 1 January this year to pay a carbon price when flying to and from Europe. It will add a surcharge of A$3.50 each way per passenger for fares booked in Australia on Qantas flights to and from London and Frankfurt. Qantas also plans to add a carbon surcharge on domestic flights from 1 July this year, for flights booked on or after 15 February, when the fixed carbon price of A$23/t is introduced.
Its estimated cost impact from the carbon price introduction is A$110mn-$115mn in the financial year to 30 June 2013, Qantas said. It will incur a carbon cost of A$75.7mn in 2012-13 with its budget airline subsidiary Jetstar facing costs of A$37mn.
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