Qantas announce Fuel and Carbon price increases

[Deleted member]

Keep dreaming that Abbott will repeal all the carbon tax legislation. Abbott can promise, jump up and down, yell and shout or even swim with the sharks but the tax is here and will be still here in 10 years time, mark this post.

Mainly because the cost of making these changes often makes it untenable.
I would like to see a number of changes, but i think it will be mainly about tinkering.

 

[Pleb Status]

Everybody seems to be pretty accepting of QF's continued fuel gouging....

You can now fly on JQ/3K PER-SIN in May on a non-sale fare for less than the QF fuel surcharge alone (when excluding the other government taxes).

For example, on 09MAY12, 3K112 PER-SIN has a non-sale fare of AUD162.37 + taxes of AUD66.63 = AUD229.00 total. The QF fuel surcharge alone will be AUD165 on the same sector, using an aircraft with a better CASM. 3K also have a sale fare available around the same time for AUD100+taxes.

No wonder QF Int is going under if their sister (and more 'profitable') airline can fly the same route for less than the cost of QF's additional fuel expense. Even if QF was to offer $0 base fares they would still be more expensive.

Maybe QF is just gouging the travelling public on the fuel surcharges. I think this is more probable as other airlines do not appear to be charging anywhere near QF.

 

[medhead]

Everybody seems to be pretty accepting of QF's continued fuel gouging....

I'm certainly not accepting of it. But it is a separate issue to the carbon tax, even if related. I notice that this thread jumped straight onto the carbon tax band wagon instead of qantas gouging, well except drron


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[Blackadder]

Keep dreaming that Abbott will repeal all the carbon tax legislation. Abbott can promise, jump up and down, yell and shout or even swim with the sharks but the tax is here and will be still here in 10 years time, mark this post.

Plus the fact after the next election, the Greens will still have control of the Senate.

 

[eastwest101]

The carbon tax adds at most $6.86, for a flight to Europe, much less for domestic travel - I think that possibly you're all over-reacting somewhat

People have a fair point that the timing of the Carbon Tax and increased Fuel Surcharges in the one press release muddies the waters a bit.

Actually opusman as I read the press release, the EU Carbon Tax is $3.50 per sector for flights in/out of Europe (into LHR for example), the increased Qantas fuel surcharge has gone up by $60 per sector for flights to Europe.

Domestic fares within Australia are going up by an average of 2.5% due to fuel increased QF fuel surcharges, the Australian Carbon Tax is collected as a surcharge from July and varies from $1.82 to $6.86 per sector depending on the distance of the flight.

As for the EU Carbon Tax - I think the more interesting development is this:

• In late October, the U.S. House of Representatives passed the ‘European Union Emissions Trading Scheme Prohibition Act of 2011’, a bill that bars U.S. airlines from complying with the EU ETS. The bill has still to pass through Congress before becoming law, but it has cross house support

 

[markis10]

Lets face it, this is just the start of the carbon tax. All the other airlines will have to follow so it isn't like they are making money out of this.

When is the next election.........I can't wait to punt the Labor party

Make a quick move to QLD, based on the last election you can even vote multiple times!

 

[opusman]

Actually opusman as I read the press release, the EU Carbon Tax is $3.50 per sector for flights in/out of Europe (into LHR for example), the increased Qantas fuel surcharge has gone up by $60 per sector for flights to Europe.

The various people in this thread were blaming Julia so I assumed it was the Aust carbon tax they were talking about - unless people have started blaming her for EU taxes now as well

 

[nlagalle]

Actually a bit rough increasing fuel surcharges on 15/2 and blaming the australian Carbon tax which doesn't start until july.
Also the Australia-USA surcharge is going up by the same amount as the Australia--Europe surcharge so how does the EU scheme explain that.
You can fool some of the people but not all.:evil:

Actually I didn't read QF were blaming the carbon tax, rather higher fuel prices.. I note that the carbon tax pricing starts in July.

 

[medhead]

Actually I didn't read QF were blaming the carbon tax, rather higher fuel prices.. I note that the carbon tax pricing starts in July.

Of course, the bit I read on the Oz website today says the cost of a barrel of Jet fuel has decreased since the last fuel surcharge was announced, USD134 vs USD127 a barrel. The exchange rate is better now as well. But they have 86% of fuel needs hedged at a worst case price of USD121, so that is pretty stable.

Anyway, on that report it is hard to see that the fuel price as risen. So it seems a false increase IMO. If they want to an increase it should be put onto the fares. (perhaps not good for those ticketing with AA)


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[nlagalle]

Of course, the bit I read on the Oz website today says the cost of a barrel of Jet fuel has decreased since the last fuel surcharge was announced, USD134 vs USD127 a barrel. The exchange rate is better now as well. But they have 86% of fuel needs hedged at a worst case price of USD121, so that is pretty stable.

Anyway, on that report it is hard to see that the fuel price as risen. So it seems a false increase IMO. If they want to an increase it should be put onto the fares. (perhaps not good for those ticketing with AA)


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Also depends on what price it was hedged against last time too.. Plus how much of the fuel costs were "absorbed" Personally they should just raise the ticket price and be done with it..

 

[eastwest101]

Good points Medhead -considering this was released to the ASX I would expect that QF would have some evidence to support their case for an increase in jet fuel costs? Good luck trying to get it though. Perhaps it should be renamed an "innapropriate fuel hedging strategy" levy.....

Agree with other posters that they should remove Fuel Levy and just have their fares vary and adjusted according to their costs. In the true spirit of user pays - not sure if some smart cough has ever tried to refuse to pay the fuel surcharge with the promise that they will provide their own barrel of jet fuel upon checking in.....

 

[Mal]

The carbon tax adds at most $6.86, for a flight to Europe, much less for domestic travel - I think that possibly you're all over-reacting somewhat

Nope. Of course the carbon tax is going to cause huge problems within Australia. This is the start. A very small start, but a start.

The Treasury calculators showed that I would be "financially disadvantaged" based on a carbon tax, and that was a "conservative" estimate. Increases like this only cement my belief that Australia is a horrible place to be living.

Must run. Have to resign from my job and produce 8 children , that might make things more equitable for me.

 

[medhead]

The Treasury calculators showed that I would be "financially disadvantaged" based on a carbon tax, and that was a "conservative" estimate. Increases like this only cement my belief that Australia is a horrible place to be living.

In that context I would suggest a conservative estimate will be an over estimate. That is generally what conservative means, worst case, not an underestimate. For example, if one did a conservative estimate of someone exposure to a hazard substances it will over estimate the exposure not under estimate. I'm sure you can see the analogy between hazardous substances and the carbon tax.

 

[drron]

In that context I would suggest a conservative estimate will be an over estimate. That is generally what conservative means, worst case, not an underestimate. For example, if one did a conservative estimate of someone exposure to a hazard substances it will over estimate the exposure not under estimate. I'm sure you can see the analogy between hazardous substances and the carbon tax.

Unfortunately though you are dealing with Australian governments who have a near perfect track record for over estimating income and under estimating costs.

 

[medhead]

Unfortunately though you are dealing with Australian governments who have a near perfect track record for over estimating income and under estimating costs.

So a conservative estimate should balance that out

 

[anat0l]

Boring!


So fares are going up because fuel is up. Well that's a bit dubious since fuel seems quite stable, but then again QF did hedge a significant amount of its fuel so I think it's paying its dues on that now. Then again, if we all had a crystal ball then many arm chair experts would shut up right now, too. Predicting the price of fuel is not the same as forecasting for climate change scenarios - at least one of them has science behind it, the other is black magic with the witches in corporate suits!


As for the carbon price thing - we knew this was coming. There's already another carbon tax thread and I don't feel like cleaning the mud off me from that last thread and doing it again here, so I'll just say that I don't care much about the price increase due to the carbon taxes, which I think are minor in retrospect. And I don't buy the slippery-slope argument either.


Oddly enough, I don't see Virgin following suit significantly. Virgin burns far less fuel (this is a volume based thing, so they may have the same rate problem of fuel supply but overall the absolute expense and burn is lower) and have very little international operations (compared to Qantas let alone other notable international carriers). Plus, they have no European operations, so no exposure to the EU tax (EY, their partner, will absorb most of this for them ). So Virgin probably isn't going to raise anything soon.


Of course, if the Australian government were more sage, they'd legislate that it'd be illegal for any company to pass down the costs due to the carbon tax at all.

 

[Standby]

.


Oddly enough, I don't see Virgin following suit significantly. Virgin burns far less fuel (this is a volume based thing, so they may have the same rate problem of fuel supply but overall the absolute expense and burn is lower) and have very little international operations (compared to Qantas let alone other notable international carriers). Plus, they have no European operations, so no exposure to the EU tax (EY, their partner, will absorb most of this for them ). So Virgin probably isn't going to raise anything soon.


.

I'll raise a couple of points after a catch up with our Corp TA this week 1/In the period post Tiger grounding and during the QF industrial period/recovery DJ increased pricing on most of their major routes . QF didnt obviously didnt want to risk further ire of people they were already disrupting by matching those increases and now look to be playing catch up.
DJ must have a corp policy of never announcing network or rolling price changes and they do them for immediate effect. QF seem to feel the need to communicate to agents/corps by being transparent and usually giving 7-14 days notice .I'm not saying 1 airlines method is right or wrong but that how its done.
2/ DJ probobly have been too busy with bedding down the game change to worry about Carbon Tax. Now QF have moved as they said last year they would,Dj will match or further increase price. For every punter booking now beyond Jun30 the Govt will have their hand out.
Given all the significant airline profit falls announced last week,including SQ,HA&LAN plus LH announcing significant cost cuts the majors are hurting looks like the cycle is back to fares/surcharges go up soon followed by capacity to come out

 

[beardoc]

Just tried a few things through the carbon offset system QF offers: https://www.qantas.com.au/travel/airlines/offset-my-flight/global/en

Note that QF offers the carbon offset as a way of completely offsetting the carbon emissions so that your flight is carbon neutral. Unless someone can explain to me differently, this would suggest that if you fully offset, there will be no extra liability under the scheme, correct?

Anyway, here's a few comparisons (using the Carbon Offset pricing tool and the ASX announcement for one-way fares):

Flight	Carbon Offset	QF Price Increase
SYD-BNE	94c	$2.79
SYD-PER	$3.09	$6.86
SYD-SIN-LHR	$17.99	$60
SYD-JNB	$21.93	$40

This looks like price gouging over and above the actual carbon cost. If QF wanted to stop the carbon tax increases, they could buy their own credits under their own system, and the cost would be limited to the cost of buying the offsets. That the surcharge increases are way above what the carbon costs are suggests that QF is using the carbon tax as a ruse to grab even more money and blame the government for it ("it's not us, it's the EU and the Australian carbon pricing schemes that are making us do this!").

I really dislike it when companies do this.

 

[Standby]

Just tried a few things through the carbon offset system QF offers: https://www.qantas.com.au/travel/airlines/offset-my-flight/global/en

Note that QF offers the carbon offset as a way of completely offsetting the carbon emissions so that your flight is carbon neutral. Unless someone can explain to me differently, this would suggest that if you fully offset, there will be no extra liability under the scheme, correct?

Anyway, here's a few comparisons (using the Carbon Offset pricing tool and the ASX announcement for one-way fares):

Flight	Carbon Offset	QF Price Increase
SYD-BNE	94c	$2.79
SYD-PER	$3.09	$6.86
SYD-SIN-LHR	$17.99	$60
SYD-JNB	$21.93	$40

This looks like price gouging over and above the actual carbon cost. If QF wanted to stop the carbon tax increases, they could buy their own credits under their own system, and the cost would be limited to the cost of buying the offsets. That the surcharge increases are way above what the carbon costs are suggests that QF is using the carbon tax as a ruse to grab even more money and blame the government for it ("it's not us, it's the EU and the Australian carbon pricing schemes that are making us do this!").

I really dislike it when companies do this.

I see the old scheme is irrelevant as it was an idividual recovery cost based on carbon offset vs the Govt imposed scheme of setting a starting point $ per tonne of total fuel burnt, not per individual passenger(which will increase over time) .The announcement coupled a general fare increase due to increased business costs (fuel) ,the Carbon collection is bundled in with that. As QF collect the Dom carbon tax as a surcharge (YQ) they just pass that total amont to the govt ,they dont keep any of it. so if there's an overcollection the Govt gets it.I'm sure they would have had to explain and get agreement with regulators with their methodology otherwise the ACCC& Govt would be screaming by now
Also the obvious difference between the old offset scheme and the new one,all the old scheme actually went to climate improvement vs the current Govts intentions

 

[DC3]

As Qantas is on the government's (500) Biggest Polluters list, they are liable to be charged $23 per tonne of carbon emitted.

Does Qantas expect us to believe that each pax results in almost 3 tonnes of carbon pollution for a flight SYD-SIN-LHR (@ $60 per pax, extra)? Or have I got something wrong here.