QF and DJ raise prices...

[Montague S]

...not unexpected with the ridiculous price of crude oil these days!

QANTAS will increase its domestic and international airfares flights and suspend its share buyback program due to ongoing increases in the cost of jet fuel.
But the national carrier says while rise in fuel prices is a concern, it remains confident of meeting its guidance for a lift in 2007/08 reported pre-tax profit of at least 40 per cent, from the previous year.

Qantas will increase airfares sold in Australia from May 9, with domestic fares rising by approximately 3.5 per cent and international fares rising by about 3 per cent.

The airline's low cost offshoot Jetstar is currently reviewing its fare levels.

Proposed increases to Qantas fares sold outside Australia are also under consideration.

Qantas chief executive Geoff Dixon said the group's fuel hedging program, its two brand strategy and efficiency gains from its sustainable future program to had enabled it to manage higher fuel costs to date.

"The continuing rise of jet fuel prices is of concern, however we have hedged 34 per cent of our 2008/09 needs at a price of $US90 ($96) per barrel," he said.

Qantas said the majority of its hedging is in the first half of the fiscal year and is predominantly in the form of options contracts.

"But if high fuel prices persist beyond this point it would be of increasing concern," Mr Dixon said.

Mr Dixon said the group was trying to minimise the impact of fuel through its ongoing initiatives to reduce overall costs, including a hiring freeze and cutting back on non-essential spending.

"However, an increase in base fares is now necessary to partially bridge the widening gap between the actual increase in the cost of fuel and the amount we offset through surcharges or non-fuel cost improvements," he said.

"We will continue to monitor fare and surcharge levels and review our network and schedule to optimise capacity."

Mr Dixon said that due to fuel price volatility the group believed it was "prudent" to suspend an on-market share buyback program, which began last September.

The group has so far returned more than $500 million to its shareholders.

"We remain confident of meeting our guidance for a 2007/08 result of at least 40 per cent higher than the 2006/07 reported profit before tax," Mr Dixon said.

http://www.news.com.au/perthnow/stor...23-951,00.html

[Kieran Wells]

surprise surprise...
Although with the Aussie $ nearly matching its US cousin who knows what will happen....

[Kurt A]

VIRGIN BLUE AND PACIFIC BLUE TO INCREASE FARES DUE TO FUEL COSTS

Virgin Blue Airlines has announced it will reluctantly implement a price increase across its network following the continued and unprecedented increase in jet fuel prices.

The airline will increase Virgin Blue one-way Australian domestic fares between AUD$5-$10, based upon flight sector length. Pacific Blue Trans-Tasman and short haul international fares will increase between $5-$15. New Zealand domestic fares currently remain under review.

In a statement to the Australian Stock Exchange on 11 April, 2008 after jet fuel prices escalated to in excess of US$135, the airline said that continuing to absorb excessive fuel costs was an untenable position should fuel prices remain at that level. Jet fuel has since continued to increase and has now reached US$144 per barrel.

The new fares will come into effect progressively from Tuesday 6 May 2008 giving travellers time to get in and make bookings at current pricing levels.

-dj

[Andrew M]

Sign of the times

[Craig Murray]

Would be interesting to await any further developments to this thread, it is widely known that oil has been dropping in price and currently sits at just over $100USD per barrell down near $15 from where it was a month ago. Furthermore the price is down approximately $44USD from where it was in July when it peaked close to $145USD per drum. The current one year forecast is at $116USD per barrell.

Now I've no problems with these fuel surcharges because they are pretty much transparent and when booking we can see how much of our fare is Taxes and Surcharges, but with this transparency will no doubt come questions when the prices start to trend downwards as they are doing now (albeit slightly).

Aviation fuel prices are down 7.8% to $131.5USD per barrell on this time last month however it is to be noted that they are up 44% on last year.

Here's a link with a little more info:

Jet Fuel Price Monitor

Also of note is the price for ULP in Australia, despite these drops there seems to be little relief for motorists...... a shame for the V8 lovers of this country

[Andrew M]

SQ is lowering their ticket prices slightly from what I heard over the past few days, as a result of lower oil prices.

As for petrol prices in Australia, the lower cost of a barrel of oil has been offest by a 18cent fall in the Aussie Dollar!

[Greg McDonald]

QANTAS has also come out and advised that they will not be dropping their fuel surcharge amount for a number of (supposed) reasons.....Onya Qantas