August 25, 2005

QANTAS hikes up air fares again

This week the Australian national airline, Qantas increased its extra fuel levy yet again. This is the fifth fuel surcharge increase since May 2004.

The increased air ticket cost will grab an extra A$400 million for Qantas over the next two years, and passengers will be hit with the new levy on their air ticket prices from September 1.

Qantas CEO Geoff Dixon says the decision was made reluctantly, and he blamed the price hike squarely on the cost of fuel.

Oil prices topped $US66 a barrel this week and the Centre for Global Energy Studies in the USA has predicted the oil price will stay above $US50 per barrel next year.

Meanwhile, in an effort to cut costs, Qantas's low-cost air carrier - Jetstar - is expected to start serving international holiday routes within a year.

Qantas said previously that Jetstar would play a big role in its cost-cutting exercise and could one day rival the size of its parent company.

The airline is keen to launch more non-stop destinations and avoid the added costs of flying through hubs like Singapore and Hong Kong.

And on Wednesday, Virgin Blue said it was continuing to review it's own fuel surcharge.

"We are still reviewing it," said a spokeswoman.

Among airlines who have unveiled further fuel surcharges this month are Air Canada, Thai Airways, United Airlines, Continental Airlines and Air New Zealand.