Qantas puts carbon taxes in frame for fare increases

February 6th, 201211:16 am @

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Hiked surcharges ... Qantas is raising surcharges by 24 per cent because of fuel costs and carbon tax.

Hiked surcharges … Qantas is raising surcharges by 24 per cent because of fuel costs and carbon tax. Photo: Kate Geraghty

QANTAS will raise 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.

Qantas and its regional offshoot, QantasLink, will increase domestic fares by an average 2.5 per cent from February 9.

It translates into a $5 fare increase for a flight between Sydney and Melbourne.

A one-way international flight will go up by as much as $60.

That means the total fuel surcharge for a one-way flight to the US will be $310, while those to Britain and Germany will amount to $350.

Qantas has also added an extra charge of $20 for flights to Asia and Hawaii and $40 on flights to South America and South Africa.

Qantas’s budget offshoot, Jetstar, has also surprised analysts by raising domestic tickets by $10 – as much as 7 per cent – for flights from July 1 to cover the carbon tax and higher fuel costs.

Budget airlines are more reluctant to pass on the higher cost of fuel to their passengers because they tend to be more sensitive to fare increases.

Qantas had already said the carbon tax will cost it as much as $115 million next financial year but yesterday it announced how that would translate to airfares. Qantas will charge passengers between $1.82 and $6.86 extra on a one-way ticket to cover the cost of the carbon tax.

The airline has also slapped a $3.50 surcharge on a one-way ticket to London and Frankfurt to cover the higher costs arising from the European Union’s emissions trading scheme.

The opposition renewed its attack on the Gillard government after Qantas passed on the cost of the carbon tax, which comes into force in July. ”[It] demonstrates that Australians will be paying for this tax in every service they use and every purchase they make,” the spokesman on climate action and environment, Greg Hunt, said. ”While Australia’s tourism industry is hurting due to the high Australian dollar, this increased price hit on flights will be another blow.”

Qantas tends to be followed by its arch rival, Virgin Australia, in raising surcharges. A spokeswoman said it was ”continuing to monitor the market” but did not plan to raise any of its fares ”at this point”. Virgin has previously said the carbon tax was likely to lead to a $3 increase in fares.

Qantas said the fuel surcharges, prices increases and hedging policies were still not enough to offset the higher cost of fuel. The group’s fuel bill rose by $450 million to $2.2 billion for the six months to December.

Flight Centre said last night it did not expect the fare increases to lead to any changes in travel patterns because ticket prices remained ”highly affordable”.

However, a spokesman said it believed airlines’ imposition of fuel surcharges was unnecessary and they tended to rise more frequently than they decreased.

Qantas will also increase the fuel surcharge for redemptions of its domestic frequent flyer classic award scheme by $2 to $12.

Analysts estimate the increases will boost Qantas’s revenue by as much as $500 million if they are in place for a full year.

Article source: http://www.brisbanetimes.com.au/travel/travel-news/qantas-puts-carbon-taxes-in-frame-for-fare-increases-20120202-1qvo1.html