Qantas and others to introduce Fuel Surcharge

Qantas is to introduce a fuel surcharge on passenger tickets sold after midnight on 17 May due it said to a substantial rise in jet fuel prices.

The Chief Executive Officer of Qantas Airways, Geoff Dixon, said jet fuel prices were currently about US$44 a barrel, the highest level for 14 years.

"Fuel represented about 15 per cent of Qantas' costs last year, the second largest cost to the Group after salaries and wages," Mr Dixon said.

"The US dollar price of jet fuel today is almost 60 per cent higher than it was 12 months ago - US$44 a barrel compared with US$28 a barrel - and this has significantly increased the cost to our business."

Mr Dixon said the main reasons for the jump in the fuel price were continuing tensions in the Middle East and strong global demand, particularly from the United States of America and China.

He said the last time Qantas introduced a passenger fuel surcharge was in late 2000 after jet fuel prices spiked to more than US$43 a barrel in October 2000 due to surging global demand.

The fuel surcharge will be $6 per sector for Qantas Domestic, QantasLink, Jetstar and domestic New Zealand services and $15 per sector for Qantas International services and Australian Airlines.

Many other airlines around the globe are also introducing a fuel surcharge. British Airways as one other example, has said it will add £2.50 per flight sector (£5 return trip) as a separate fuel surcharge to its fares in the UK with effect from Thursday, May 13. This fuel surcharge applies to all fares sold across the British Airways’ global network. In all markets outside of the UK a surcharge of $4 USD per flight sector will be added.