Australian airline joins BA and Singapore Airlines in upping fuel surcharges
Qantas today announced that it would increase its international fuel surcharges in response to rising oil and jet fuel prices. The changes apply to tickets issued on or after February 19. Increasing confidence in the world economy and the ongoing violence in Egypt mean that crude prices are continuing to rise. Many in the airline industry predict the cost of oil will rise further in 2011.
Other airlines, including Singapore Airlines and British Airways, have also raised fuel surcharges in recent weeks. Qantas, which today also announced that it would resume services to and from Cairns tomorrow following Cyclone Yasi, explained that it had no choice as oil and fuel prices had increased sharply in recent months. Qantas Chief Executive Officer Alan Joyce: “Year-to-date average prices for both West Texas Intermediate Crude Oil and Singapore Jet Fuel are at their highest since FY08, and second-half FY11 prices are forecast to be around 20 percent higher than in the first half.
“The price of Singapore Jet Fuel, for example, has increased from an average of US$88 a barrel in September 2010, to US$110 a barrel in January 2011, and is US$117 a barrel today.” He said that Qantas had been closely monitoring the situation, but had held off until now any move on surcharges. “But based on industry forecasts, and our own assessment, prices will, at the very least, remain at their current higher levels,” Joyce continued.
For tickets on or after February 19, the new fuel surcharges (A$ one way ex-Australia) will be $145 (previously $95) for routes to and from the UK and Europe. Before now, Qantas’ international surcharges have been reduced on four occasions since October 2006. It removed domestic and Tasman fuel surcharges in January 2009. The airline has hedged 66 percent of its remaining fuel requirement in FY11 at a worst-case crude oil price of US$93.06 per barrel, including option premium.
[pictured: Trent 900 fan blade assembly]