Singapore Airlines' announcement this morning that it will lift its
fuel surcharge next week has prompted speculation Qantas will follow
suit and increase the fuel levies on all of its international flights.
Singapore Airlines said it will increase fuel surcharges on its tickets from US$67 ($76) to US$75 on sectors to Australia from December 4.
This will see passengers pay an extra $18 for a return trip to Singapore an extra $36 for a return ticket to Europe.
"The
adjustments will offer only partial relief of higher operating costs
arising from increases in the price of jet fuel," the airline said in a
statement.
Despite the recent dip in oil prices, the cost
of aviation fuel remains at near record levels. According to Bloomberg,
the cost of a barrel of refined Singapore Jet fuel hit a record high of
US$116.80 on Monday. It is now hovering around US$113 a barrel.
Qantas last lifted its surcharges in early August when jet fuel prices were around US$85 a barrel.
The
national carrier currently charges a $370 surcharge on a return ticket
to Europe, $290 on a return trip to the US mainland, Canada, India and
South Africa, $210 to Honolulu and Asia (apart from India), and $120 to
New Zealand. In August Qantas left its domestic surcharges at $52 on a
return ticket.
The main saving grace for Qantas, however,
has been the strong Australian dollar which has continued to offset the
record prices for US dollar denominated oil. The airline also has 79
per cent of its fuel contracts for this financial year "hedged" - or
fixed - at around US$70 a barrel of crude oil. The airline is not
covered for the extra margin - called the refining margin - paid on top
of the price of crude oil for a barrel of refined fuel.
The
price of West Texas Intermediate is now trading at around US$91 a
barrel. But the record demand for air travel - driven largely by the
high Australian dollar - is also set to ensure airlines are more
confident an increase in their surcharges will not hurt demand.
While
airlines have argued the surcharges are needed to offset the cost of
fuel, Qantas and five other carriers face a class action by travel
agents over the charges. In a court action led by Slater & Gordon
it has been argued airlines have been shortchanging travel agents by
not paying commissions on fuel surcharges. Airlines register the
surcharges in the commission free "tax and levy" part of an air ticket.
But
it has been the fuel surcharges do not represent a tax but an airfare
increase, and therefore must be subject to a commission. The country's
largest travel agent Flight Centre has long complained airlines are
using the surcharges to escape paying commissions on up to one quarter
the price of an air ticket.
by Scott Rochfort | BusinessSMH.com.au | SOURCE |
http://business.smh.com.au/airlines-flag-fuel-surcharge-for-christmas
/20071130-1dw3.html
