[Montague S]

AIRFARES are likely to rise up to 20 per cent in a desperate bid by the industry to recoup spiralling costs from record high petrol prices, Australia's biggest airline has warned.

Qantas group general manager of sales and distribution Rob Gurney said yesterday at the Australian Tourism Exchange in Perth that it was inevitable airfares would increase even further to cover rising fuel costs.

The further increases, which could kick in within weeks, would also help cover the cost of new baggage security screening and carbon offset requirements.

"We have to increase prices to recover as much as we can," Mr Gurney said, referring several times to a "hypothetical 20 per cent" when speaking about the issue.

A 20 per cent increase would add $61 to a flexi-saver return flight between Sydney and Melbourne, an extra $66 for a flexi-saver Sydney to Brisbane return flight and a whopping $164 to a flexi-saver Sydney to Perth return flight..

It would also increase a return international flight between Sydney and London by as much as $444.

The warnings come as analysts yesterday tipped petrol would hit $1.75 per litre within the next fortnight.

Three weeks ago, Qantas increased airfares by 4 per cent on tickets sold after June 4, which followed a 3 per cent rise earlier in May.

"Air fares will have to go up ... (record fuel prices have been) an industry-changing event," Mr Gurney said.

"The cost of fuel is changing the way Qantas will do its business over the next two years. Where fuel (costs) end up in the long term is difficult to predict."

Mr Gurney warned it could take up to two years before aspiring travellers became accustomed to higher airfares.

He was confident, however, that travellers would eventually realise that even at 20 per cent more, airfares would still be good value compared with 15 to 20 years ago.

Over the past few weeks, Qantas has announced cuts on its domestic and international routes for its own brand and that of its low-cost wing Jetstar.

It has replaced some Qantas flights with Jetstar, due to that airline not being viable because of higher fuel costs.

Mr Gurney said Qantas would press ahead with its $35 billion orders for 200 new aircraft, 80 of which would come on stream within five years.

This was because the airline was "hugely optimistic" about the future and wanted to be set for when the oil price shock was over.

The new-generation Boeing 787 aircraft, of which Qantas has ordered 65 with an option for a further 20, use 20 per cent less fuel per passenger than current jets.

The giant Airbus 380 will also have 25 per cent more seats than the Boeing 747 it will replace from the Qantas fleet.

Qantas tickets for travel on its new A380s went on sale yesterday for flights from Melbourne and Sydney to Los Angeles from October 24. It will fly the 450-seat Airbus double-decker 380 to London from January.

Jetstar commercial general manager Bruce Buchanan said carbon trading and security screening of baggage would add to airline costs.

However, the airline would continue to offer low base fares by not charging for extras such as in-flight meals and carrying check-in baggage. Such extras would be optional costs for their passengers.

http://www.news.com.au/dailytelegrap...013605,00.html

seems QF isn't done yet with airfare hikes...

would be close on $1000 1way on a QF flexi fare from SYD to PER.