Air fuel surcharge set to rise
By Matt O'Sullivan | smh.com.au | 08 September
Fill 'er up...Qantas has raised its fuel levy on freight, and ticket prices could follow.
Qantas has given the first hint it could raise fuel levies on air tickets after increasing surcharges for freight due to higher jet fuel prices.
Speculation that airlines will raise levies has gathered steam after Japan Airlines and All Nippon Airways announced they both planned to reinstate fuel surcharges on international flights from October 1 due to increases in the price of Singapore kerosene.
Despite the cargo market suffering a worse fate than international passenger travel, Qantas's freight division has told clients fuel surcharges will increase by 14 per cent to US71c a kilogram between the US and Australia from September 16 because of higher jet fuel prices.
The average Singapore kerosene price has risen by about $15.30 a barrel to $86.20 since March.
However, jet fuel is still less than half of it what it was in July last year when it reached a high of almost $190. Qantas bowed to consumer pressure in December and scrapped fuel surcharges on domestic flights, a week after Virgin Blue cut its levy.
However, Qantas decided against further cuts to levies on international flights, which are as much as $160 for a one-way ticket to Europe. It has argued fuel costs for its international operations are higher than for domestic flights.
Qantas's international surcharges are still higher than they were when the levies were introduced in May 2004.
Travel agents say surcharges are aimed at lowering the commissions they get from airlines. They want the levies included in a ticket's base fare rather than in taxes because they see it is an operating cost.
A spokesman for Qantas confirmed surcharges had increased for freight between Australia and the Americas, Europe and Africa due to fuel increases.
However, the airline had reduced surcharges for cargo flown to Asia. He said Qantas had no plans to reinstate fuel surcharges for domestic flights or increase international levies.
It might resist increasing fuel surcharges on some international flights, particularly across the Pacific which has become one of its most competitive routes. United Airlines last month cut its levy on a one-way flight between the US and Australia from $85 to $80.
Shares in Qantas fell 1c to $2.43 yesterday.
First published by Smh.com.au on September 08 2009
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