Airlines warn of new increases in fuel surcharges
The Australian reports this morning that airline fuel surcharges look set to rise again, with Virgin Blue flagging an increase of up to $12 from next month and Qantas saying it is looking at a possible move.
Qantas chief executive Geoff Dixon confirmed yesterday that another surcharge increase was under “active consideration”.
The soaring cost of jet fuel was one of several factors blamed by Virgin Blue for a savage profit downgrade on Friday.
The downgrade saw Virgin’s net profit more than halved from last year’s result when abnormal charges for projects such as its V Australia international arm were taken into account.
Virgin warned it might be forced to raise one-way fares by $10 to $12 if fuel prices remained at record levels. The airline said fuel had risen to more than $US135 ($145) a barrel from $US111 a barrel since its half-yearly profit announcement two months ago.
“Should prices remain at these levels, Virgin Blue will incur additional fuel costs next year of over $120 million,” the airline said.
“The company has indicated that continuing to absorb excessive fuel costs is an untenable position, and despite reluctance to do so, the airline is likely to introduce a further fuel-related surcharge or ticket price increase should the fuel costs remain at current levels for the remainder ofApril.”
Regional Express earlier this month raised its fuel surcharge by $3 to $33 per sector, due to what it described as “steep and persistent rises” in the price of fuel.
“April’s fuel price is some 15 per cent higher than when we last raised our fuel levy,” Rex general manager of corporate services Irwin Tan said at the time.
The fuel surcharge, which began on April 8, also applied to the company’s Air Link subsidiary. Several overseas carriers have also raised their fuel levies.
Qantas last lifted fuel surcharges in January, but only for international tickets. For example, the airline raised the fuel surcharge from Australia to Britain by $25, from $185 to $210.
By:The Mole
John Alwyn-Jones
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