Qantas to raise fuel surcharges again

16 Jan 2014 by Clement Huang

Qantas Airways will be increasing the fuel surcharge for flights between Australia and Europe, the Middle East and parts of Asia in order to bring the fees in line with airline partner Emirates. This is the second time the airline has done so in six months (see previous report here).

According to the Australian carrier, the price hike is also due to continued high fuel prices, as well as the weak Aussie dollar. The news comes amid reports that Qantas is facing a difficult time due to increased competition on both international and domestic business.

Last week, the Sydney Morning Herald reported that credit ratings company Moody’s had lowered Qantas to junk status, which could lead to higher interest rates for any future loans by the airline. This is on top of news that the carrier will be axing at least 1,000 jobs, and is expected to report a loss of up to AU$300 million (US$264 million) during the second half of 2013.

The increase in fuel prices will be applicable to many of the international routes where Qantas is struggling the most, such as Singapore and Europe. Due to Australia’s role as an “end destination,” the carrier does not get the same passenger traffic of connection hubs such as Hong Kong and Abu Dhabi.

Therefore, a one-way economy class ticket to Europe will carry a fuel surcharge of AU$270 (US$238), up from the previous fee of AU$255 (US$225). Meanwhile, the cost of a one-way business class ticket is set to increase by 11 per cent, from AU$445 (US$392) to AU$495 (US$436). These changes will be effective for bookings made from January 23.

However, Asian routes that are not part of the partnership with Emirates will be spared from the price hike. These include Hong Kong, Shanghai and Tokyo. Costs of flights to the US will also remain unchanged, as the main aim is to keep the costs involved in line with Emirates.      

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Clement Huang

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