Qantas will increase surcharges for international and domestic flights by as much as 24 per cent, blaming higher fuel costs and the impact of carbon taxes in Australia and Europe.
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The airline announced today that it will increase surcharges for one-way international flights by as much as $60. That means the total surcharge for a one-way flight to the US will be $310, while those to the UK and Germany will amount to $350.
Qantas has also put on an extra charge of $20 for flights to Asia and Hawaii – taking the total surcharge to $165 – and $40 for flights to South America and South Africa (taking it to $240).
Qantas's budget offshoot, Jetstar, will also increase so-called lead-in domestic fares by $10 in response to higher fuel prices and the introduction of the carbon tax in Australia from July. The increase will take effect from February 15 for flights which are taken from July 1 onwards.
Qantas and its regional offshoot, QantasLink, will also increase domestic fares by as much as 2.5 per cent from February 9. It means a one-way flight between Sydney and Melbourne will increase from $117 to $122.
The airline has put the cost impact of Europe's emissions trading scheme at $2.3 million this year. As a result of the European scheme, Qantas will slap a $3.50 surcharge on one-way fares booked in Australia for flights to London and Frankfurt.
The airline has previously put the total cost of a carbon tax in Australia, which will take effect from July, at between $110 million and $115 million next financial year.
Qantas will pass on this cost to passengers in the form of a $1.82 surcharge for flights of up to 700 kilometres, $2.79 for those between 701 and 1200 kilometres, $4 for those up to 1900 kilometres and $6.86 for more than 1900 kilometres.
The airline last increased fuel surcharges in April last year in response to higher fuel costs. It tends to be followed by its arch rival, Virgin Australia, which last increased its surcharges in March last year.
Qantas said the fuel surcharges, prices increases and hedging policies were still enough to offset the higher cost of fuel prices. The group's fuel bill rose by $450 million to $2.2 billion for the six months to December.
Budget airlines such as Jetstar and the Singapore Airlines-backed Tiger Airways are most vulnerable to high fuel prices because fuel makes up a bigger proportion of their total costs. Their passengers are also more sensitive to higher fares and other charges than those who fly on airlines offering a premium service.
