More airlines adjust fuel surcharge

26th Apr 2006

Due to the continuing rise in the price of crude oil, and with it the kerosene purchase price the Austrian Airlines Group has been forced to make an adjustment to its fuel surcharge. Qantas have also revealed changes to their surcharges. An increase of EUR 10 is introduced on long-haul flights, the new fuel surcharge of EUR 62 per one-way flight will then apply. The surcharge in the short-haul and medium-haul segments will remain unchanged at EUR 12 per one-way flight. The new level applies for all long-haul tickets of the Austrian Airlines Group purchased and issued as of 5. May 2006.

The increase is only being introduced, therefore, on those routes involving a high level of fuel consumption due to the long flight distance. An Airbus A330 on a Vienna- New York- Vienna round trip, for example, uses around 90 tons of kerosene. On the Vienna-Sydney-Vienna route, the fuel consumption of a Boeing 777 is as high as 265 tons.

Meanwhile the Qantas Group announced that it would increase its domestic and international fuel surcharges in response to continuing record crude oil and jet fuel prices.

The Executive General Manager of Qantas, Mr John Borghetti, said the cost of fuel remained a critical issue - not only for Qantas, but across the airline industry. “We introduced our first fuel surcharges in May 2004, when crude oil was trading at US$40 a barrel,” Mr Borghetti said. “Since then, oil prices have nearly doubled and the benchmark Singapore jet fuel price has increased from US$44 a barrel to more than US$88 a barrel.  “Our 2005/06 fuel bill is expected to be around A$2.9 billion, and on current forecasts, approximately A$3.9 billion in 2006/07 after hedging.  “While we have hedged the crude oil component of our 2005/06 fuel cost at around US$56 a barrel, the unprecedented increase in the price of jet fuel means the Group’s fuel bill will have risen by around A$1 billion after hedging, compared to 2004/05. “Our fuel surcharges, including this latest increase, will only partially offset some of this very significant additional cost.”  Mr Borghetti said Qantas would continue to closely monitor the surcharges and their impact on demand. The surcharges apply to each flight/sector shown on a ticket.


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