Qantas announces carbon price fare hike

February 3rd, 201210:10 am @


ASHLEY HALL: The aviation sector is still struggling to recover from the global financial crisis.

Today two of the world’s largest carriers have revealed exactly how hard it is.

American Airlines will shed 13,000 staff under its bankruptcy re-organisation plan, while Singapore Airlines has announced a drop in profits of more than 50 per cent.

Meanwhile, Qantas is planning to increase some of its international fares by more than $60.

The company blames higher fuel costs, as well as the impact of carbon pricing schemes in Europe and in Australia.

Adam Harvey reports.

ADAM HARVEY: Mandy Ma is flying from Sydney to Hong Kong with Qantas, as she does about once a year, and from next week the trip will cost her another $20 in fuel surcharges and when the carbon price comes into effect in July there’ll be another one-way fee of just under $7.

Another $27 won’t max out her credit card but still she’s not a happy traveller.

MANDY MA: I think it is just going to ruin like tourism like in other countries as well. People are not going to be able to afford, you know, the cost of living also going on holidays – like it just ruins a lot of leisure, I guess, for people.

ADAM HARVEY: Qantas has released the details of its carbon pricing fees. The airline estimates that it will add about $115 million to its bottom line so it will increase every domestic fare by between $1.82 and $6.86.

That’s on top of a $5 fuel increase on one-way fares between Sydney and Melbourne and similar increases for other legs.

Jetstar will increase all its fares by a flat $10.

Australian Competition and Consumer Commission chairman Rod Sims says the airline’s doing the right thing by being up-front about what it’s going to charge.

ROD SIMS: They are saying the price increase will come in after July. They are saying it will be linked to distance and it seems quite modest – less than $2 for a Sydney to Melbourne airfare – but having said that, these are the type of representations that will come across our desk and we will have a look at it.

ADAM HARVEY: The Jetstar increase is a flat increase. Is there any problem with that rather than an increase that is linked to distance?

ROD SIMS: That is something we’ll have a look at. That is a little- a little unusual when- you know, when it is such round numbers.

ADAM HARVEY: These are lean times for global airlines. The troubled American Airlines says it wants to cut 13,000 jobs, and Singapore Airlines’ profits have been cut in half.

Geoffrey Thomas is the aviation editor with the West Australian newspaper.

GEOFFREY THOMAS: Well, it is just another grim day, another grim week. It seems to roll on. Two separate issues though. First of all American Airlines is the last of the major legacy airlines in the United States to go into Chapter 11 and the fact that it was the only one left that had not gone into this restructuring process put it at a significant competitive disadvantage.

ADAM HARVEY: Wages is the problem there – Singapore, it’s fuel prices.

GEOFFREY THOMAS: Fuel is back up to the nasty levels of 2008. The other big issue is that air cargo is down significantly – and this is sort of a portent of things to come as far as the world economy is concerned because air cargo is really the barometer of the health of the world’s economy.

ADAM HARVEY: A $60 increase for fuel, a $10 increase for carbon – will it have an impact on how much people fly?

GEOFFREY THOMAS: Look, indeed aviation is an economic enabler but still gets taxed relentlessly by governments interested in you know, propping up shortfalls in revenue. And yes, it is an impediment to travel.

ADAM HARVEY: But back at Sydney Airport, passengers like Kerry Lee say a small increase in levies won’t make any difference to them.

KERRY LEE: Absolutely not. In fact, I believe a lot of people already pay the additional charges to offset the carbon credits anyway.

ASHLEY HALL: Qantas passenger Kerry Lee ending that report from Adam Harvey.

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