Qantas sticking to charging passengers for carbon tax

[rechoboam]

Actually not with later generation biofuel sources. Certainly that was the first approach but things have changed. The BA/QF research involves an algae that produces the "fuel" as part of its photosynthesis IIRC. It sounded pretty good, don't even need to convert biomass. I'm sure I provided a link to a new scientist story about this around here somewhere.

Edit: My memory might not be that good :shock horror: The Solazyme bit on this page sounds like what I read about. Fermentation not photosynthesis. But digging into my memory again, it was a process that used sunlight and CO2 to feed the fermentation. So they were talking about putting it next to a coal power station.

Sustainable Aviation Fuel and Qantas

Hang on...

"A new study suggests that overall the CO2 emissions attendant to producing biofuel from algae may be worse than those from corn, canola (rape-seed) or switch grass. According to a life-cycle analysis, the land-based crops all were found to sequester more carbon than that incurred in growing them, while the contrary was true for growing algae, meaning that replacing fossil fuels by algal fuels could cause an overall increase in carbon emissions."​

I can't help thinking that a very large proportion of green schemes aren't what they are cracked up to be.

 

[777]

Hang on...

"A new study suggests that overall the CO2 emissions attendant to producing biofuel from algae may be worse than those from corn, canola (rape-seed) or switch grass. According to a life-cycle analysis, the land-based crops all were found to sequester more carbon than that incurred in growing them, while the contrary was true for growing algae, meaning that replacing fossil fuels by algal fuels could cause an overall increase in carbon emissions."​

I can't help thinking that a very large proportion of green schemes aren't what they are cracked up to be.

You're comparing apples and oranges though. The correct comparison is between algal fuels and fossil fuels if looking at over all c02 emmisions.

 

[mannej]

Hang on...

"A new study suggests that overall the CO2 emissions attendant to producing biofuel from algae may be worse than those from corn, canola (rape-seed) or switch grass. According to a life-cycle analysis, the land-based crops all were found to sequester more carbon than that incurred in growing them, while the contrary was true for growing algae, meaning that replacing fossil fuels by algal fuels could cause an overall increase in carbon emissions."​

I can't help thinking that a very large proportion of green schemes aren't what they are cracked up to be.

And where is the reference point to the current emissions provided by the current, more traditional methods?

 

[medhead]

Hang on...

"A new study suggests that overall the CO2 emissions attendant to producing biofuel from algae may be worse than those from corn, canola (rape-seed) or switch grass. According to a life-cycle analysis, the land-based crops all were found to sequester more carbon than that incurred in growing them, while the contrary was true for growing algae, meaning that replacing fossil fuels by algal fuels could cause an overall increase in carbon emissions."​

I can't help thinking that a very large proportion of green schemes aren't what they are cracked up to be.

[-]Well I'm digging into memory banks again; but in the story I'm thinking of the algae wasn't consumed. It produced fuel by whatever process, which could be harvested and kept producing. So the algae only had to be grown once as such.[/-] I'll try doing some searches.


Ok searching done. The article from New Scientist, date 11 May 2011, is titled Renewable oil: Ancient bacteria could fuel modern life.

So I was wrong, bacteria not algae. But the basic details:

I'm staring at a tank filled with bubbling liquid the colour of steamed spinach. Swimming inside are photosynthetic Cyanobacteria. Although their kind are extremely common, these bacteria differ from their wild counterparts. Their DNA has been tweaked so that, given light, water and carbon dioxide, they secrete alkanes - the primary components of diesel.

The full article is behind a pay wall so that is about all that's publicly available.

 

[rechoboam]

OK I decided to educate myself a little. I found some good articles in Science magazine and apologise for being off topic again:

...the oils they produce can be refined into conventional transportation fuels that can be distributed using existinginfrastructure. The market has begun to recognize those strengths: In 2006, Algenol Biofuels, a Florida-based company, announced an $850 million project with Mexico’s Sonora Fields S.A.P.I. de C.V. to produce ethanol from algae[...] Among the biggest are reengineering algae to produce more hydrocarbons and to make molecules that more closely resemble refined gasoline.

If such a promise comes to pass, algae farms on the scale of Colorado could produce all the gasoline used in the United States each year, a small fraction of the land that would be required for making a comparable amount of biofuels from corn or cellulose​

The advantages of algae are the fact that in theory the supply is unlimited and can regenerate, I suppose it sequesters carbon when it grows, but the end product is fuel - it can fuel aircraft and there are efforts to create diesel as well. The cheapest algal fuels are now about $2.25 a liter which is more expensive than petrol but getting to a competitive price.
As I understand it if it were widely used there would still be a carbon-based economy but one in which the carbon dioxide is recycled rather than being dumped rapidly into the atmosphere from slowly-deposited ancient sources. I have looked but can't find any figures as to how much net CO2 is produced as a result.

 

[Simsy85]

Maybe one day people will wake up and realise that the whole reason for the Carbon tax is that it *IS* passed onto the customer *facepalm*

Seriously guys, that way people will have a financial incentive to choose a different company who isn't passing on cost's, because they use cleaner methods (which they have attained, thanks to grants and subsidies, funded by the carbon price).

 

[Sprucegoose]

Maybe one day people will wake up and realise that the whole reason for the Carbon tax is that it *IS* passed onto the customer *facepalm*

Seriously guys, that way people will have a financial incentive to choose a different company who isn't passing on cost's, because they use cleaner methods (which they have attained, thanks to grants and subsidies, funded by the carbon price).

which is the main reason Julia is going to cop it in the neck at the next election!!

 

[ajw373]

Slightly OT I know, but a week or two back there was an article in the Canberra Crimes about the new Canberra Airport terminal pointing out how, due to the carbon tax the airport has had to invest in ways to reduce the energy bills and the cost of these. I couldn't actually work out if the article was saying this was a good or bad thing. Though from my perspective it was actually a classic example of what the carbon tax is all about. Namely force them through higher prices to look at more efficent ways of meeting their energy needs, thus reducing dependance on carbon based fuels. In the case of Canberra airport it was some aircon/heating system that made better use of the heat energy produced by people.

 

[ajw373]

Seriously guys, that way people will have a financial incentive to choose a different company who isn't passing on cost's, because they use cleaner methods (which they have attained, thanks to grants and subsidies, funded by the carbon price).

And thats a bad thing?

 

[RAM]

And thats a bad thing?

Well, let's think of the biggest ongoing case study in Australia - Supermarket Price Wars.

The pressure for consumers or "incentive" as mentioned above to choose a better company due to the carbon tax boils down to choose a "cheaper" supplier if you call a spade a spade.

Is that a bad thing? Make up your own mind but looking at the Supermarkets consider this:

There is now not one Australian farmer producing broccoli for packaging as "frozen" broccoli. Virtually all frozen broccoli is now produced in China (carbon impacts anyone?). There is some packaged in NZ from broccoli imported into NZ from China and it is labelled product of NZ.

Australian consumers chose the cheaper option and no more Australian farmers in that area. Regardless of whether brand name broccoli or store brand.

That is the most extreme example I've found so far.

The incentives existed, the consumer chose but was that what any single consumer expected the outcome would be? I do not think so - more likely most thought what they did would not make a difference.

So back to the real question - why does Q put up fuel surcharge for all Q flights and not Jetstar if it is being above-board with passing on Carbon tax impost as well?

 

[Moody]

Well, let's think of the biggest ongoing case study in Australia - Supermarket Price Wars.

The pressure for consumers or "incentive" as mentioned above to choose a better company due to the carbon tax boils down to choose a "cheaper" supplier if you call a spade a spade.

Is that a bad thing? Make up your own mind but looking at the Supermarkets consider this:

There is now not one Australian farmer producing broccoli for packaging as "frozen" broccoli. Virtually all frozen broccoli is now produced in China (carbon impacts anyone?). There is some packaged in NZ from broccoli imported into NZ from China and it is labelled product of NZ.

Australian consumers chose the cheaper option and no more Australian farmers in that area. Regardless of whether brand name broccoli or store brand.

That is the most extreme example I've found so far.

The incentives existed, the consumer chose but was that what any single consumer expected the outcome would be? I do not think so - more likely most thought what they did would not make a difference.

So back to the real question - why does Q put up fuel surcharge for all Q flights and not Jetstar if it is being above-board with passing on Carbon tax impost as well?

I didn't realise that every Australian farmer stopped producing broccoli for snap freezing because of the impending carbon tax. Why hasn't Tony Abbott been jumping all over that one? Doesn't really impact me as all the fruit and veges we buy are 100% Australian, but assuming I had a choice between a local product and an O/S one I have a natural bias towards the former that far outweighs the amount of difference a carbon tax makes.

On the other hand if Virgin are 10% cheaper because of better control of costs (including the impact of a carbon tax) I don't particularly care how the airfare breaks down, do you? If Qantas really want to call out the supposed pollution tax proportion of the airfare, then I would like them to also have a column for "Executive Salaries" and "Corporate Lawyers" so that I can see all the negatives on the balance sheet.

 

[ajw373]

I didn't realise that every Australian farmer stopped producing broccoli for snap freezing because of the impending carbon tax. Why hasn't Tony Abbott been jumping all over that one?

As I said in a post that has been removed for some reason, the poster isn't actually saying the carbon tax is the cause of this issue, but the supermarket wars putting price pressure on suppliers.

I am not 100% sure what the comment had to do with what I was saying (and the comment from the poster was in response to my post). I was simply stating if a company adjusts their ways to reduce pollution even if given a help by the carbon tax then it isn't such a bad thing.

On the other hand if Virgin are 10% cheaper because of better control of costs (including the impact of a carbon tax) I don't particularly care how the airfare breaks down, do you? If Qantas really want to call out the supposed pollution tax proportion of the airfare, then I would like them to also have a column for "Executive Salaries" and "Corporate Lawyers" so that I can see all the negatives on the balance sheet.

Must admit I have never understood all this surcharge business. To me the fare is the fare is the fare. The only time surcharges should be seperate is if they are optional. Such as the surcharge for using a credit card. (not saying I agree with the surcharge either BTW just saying it is an example of one that makes sense to be seperate). But so called surcharges that make up the fare make no sense.

 

[serfty]

Some posts discussing general issues in relation to Carbon Tax have been moved:

http://www.australianfrequentflyer.com.au/community/open-discussion/carbon-tax-29438.html
​

Please stick to Aviation issues specifically in relation to Carbon Tax here.

 

[RAM]

I didn't realise that every Australian farmer stopped producing broccoli for snap freezing because of the impending carbon tax (NEITHER DID I). Why hasn't Tony Abbott been jumping all over that one (MAYBE BECAUSE HE READS MORE CAREFULLY THAN SOME PERHAPS - RAM)? Doesn't really impact me as all the fruit and veges we buy are 100% Australian, but assuming I had a choice between a local product and an O/S one I have a natural bias towards the former that far outweighs the amount of difference a carbon tax makes (WRONG ACTUALLY, if Fed Gov spin was factual about China & carbon pricing - local product produces a fraction of carbon that Chinese product does - RAM).

On the other hand if Virgin are 10% cheaper because of better control of costs (including the impact of a carbon tax) I don't particularly care how the airfare breaks down, do you(YES -RAM)? If Qantas really want to call out the supposed pollution tax proportion of the airfare, then I would like them to also have a column for "Executive Salaries" and "Corporate Lawyers" so that I can see all the negatives on the balance sheet(and column for cost transfers from Jetstar - RAM).

You missed the point, my post did not say the carbon tax had anything to do with the exit of Australian grown broccoli for snap freezing was due to the carbon tax.

That is something you said that is baseless.

The point made was that "incentives" making (some) air fares more expensive can have unforeseen results.

The point you make about a more efficient airline offering better prices is spot on.

But in Q's case they have been loading extra costs onto QI and not Jetstar International or domestic (see Q fuel surcharge announcements of increased fuel surcharge for all QI routes but only some Jetstar).

Selective pricing within one airline's own operations has nothing to do with a Carbon Tax, fuel costs but senior management trying to engineer an outcome. Making QI's price uncompetitive vs Jetstar's will definitely get that outcome.

Subsequent outcome is clear - QI not profitable (falling ticket sales/mkt share/reduced destinations) and Jetstar super profitable (rising ticket sales with lower surcharges/more destinations).

Given fuel burn is normally greatest (& least efficient) on takeoff and climbing to cruse altitude then on a mileage basis short haul domestic should have a much higher fuel surcharge and CARBON TAX cost / kms than international flights.

Yet that is not the ratio of fuel surcharge nor carbon tax is it that Q is charging Q passengers vs Jetstar? The US fuel surcharge is $340 one way yet trans-Tasman is $30. Flying times difference factor of about 4, surcharge ratio 11.


On air fare break down - Yes I care greatly. Here is a Jetstar Syd/Mel rtn for July 19/20

Fare 1: Carrier JQ HHOW SYD to MEL Passenger type ADT, one-way fare, booking code H Covers SYD-MEL (Economy)	AU$79.05
Fare 2: Carrier JQ NHOWA MEL to SYD Passenger type ADT, one-way fare, booking code N Covers AVV-SYD (Economy)	AU$109.78
Australian Goods & Services Tax (UO)	AU$18.90
Australian Safety & Security Surcharge (WG)	AU$1.81
Australian Domestic Passenger Service Charge (QR)	AU$10.87
Australian Domestic Passenger Service Charge (QR)	AU$7.41
Australian Safety & Security Surcharge (WG)	AU$1.81
Subtotal per passenger	AU$229.80
Number of passengers	x1
Total airfare & taxes	AU$229.80

• This ticket is non-refundable.
• Changes to this ticket will incur a penalty fee.
• No changes may be made to this ticket after departure.

Fare construction

SYD JQ MEL 79.05HHOW JQ SYD 109.78NHOWA AUD 188.83 END XT 18.28QR 18.90UO 3.62WG



Here is Q SYD/FRA rtn for July 19 rtn July 28

Fare 1: Carrier QF OJFLTR3 SYD to FRA Passenger type ADT, round trip fare, booking code O Covers SYD-SIN (Economy), SIN-FRA (Economy)	AU$725.00
Fare 2: Carrier QF HHSS FRA to SYD Passenger type ADT, round trip fare, booking code H Covers FRA-SYD (Economy)	AU$1,714.50
QF YQ surcharge (YQ)	AU$7.00
Singapore Passenger Service Charge (SG)	AU$14.60
Singapore Passenger Security Service Charge (OO)	AU$4.80
QF YQ surcharge (YQ)	AU$760.00 = Fuel Surcharge
QF YR surcharge (YR)	AU$30.00
Australian Passenger Movement Charge (AU)	AU$55.00
Australian Int'l Passenger Service Charge (WY)	AU$25.92
Australian Int'l Passenger Service Charge (WY)	AU$25.92
German Airport Security Tax (DE)	AU$8.10
German Passenger Service Charge (RA)	AU$38.30
German Air Transport Tax (OY)	AU$53.60
Subtotal per passenger	AU$3,463.24
Number of passengers	x1
Total airfare & taxes	AU$3,463.24

• This ticket is non-refundable.
• Changes to this ticket will incur a penalty fee.

Fare construction

SYD QF X/SIN QF FRA Q24.56 687.94OJFLTR3 QF SYD Q24.56 1660.40HHSS NUC 2397.46 END ROE 1.017522 XT 55.00AU 51.84WY 4.80OO 14.60SG 8.10DE 53.60OY 38.30RA 767.00YQ 30.00YR


So if you dig on the Q airfare you find the surcharges (Oh look a carbon tax and fuel surcharge) but with Jetstar nothing shown but air fare.

If you make a points booking you pay the surcharges & taxes on top of the points. Doing a comparison on QI award bookings - it was cheaper for me to buy a QI business class (BA code share) LHR-FRA ticket online than the surcharges and taxes on a QI classic award booking for exact same seat and flight - go figure? Mind you I never got the FF points for it and after the third attempt I gave up.

This is a great (terrible depending on viewpoint) example a SYD/LAX rtn July 18 July 29 fare. Good way to avoid award point QI redemptions and lower patronage even further.

Fare 1: Carrier QF OLSP2 SYD to LAX Passenger type ADT, round trip fare, booking code O Covers SYD-LAX (Economy)	AU$305.00
Fare 2: Carrier QF QLSP2 LAX to SYD Passenger type ADT, round trip fare, booking code Q Covers LAX-SYD (Economy)	AU$430.00
(YQ)	AU$680.00 So rewards booking - surcharge is more than fare component = RIP OFF
(YR)	AU$30.00
USDA APHIS Fee (XA)	AU$5.10
US Immigration Fee (XY)	AU$7.10
US Customs Fee (YC)	AU$5.60
Australian Passenger Movement Charge (AU)	AU$55.00
Australian Int'l Passenger Service Charge (WY)	AU$25.92
US International Arrival Tax (US)	AU$17.00
Australian Int'l Passenger Service Charge (WY)	AU$25.92
US International Departure Tax (US)	AU$17.00
US September 11th Security Fee (AY)	AU$2.60
US Passenger Facility Charge (XF)	AU$4.60
Subtotal per passenger	AU$1,610.84
Number of passengers	x1
Total airfare & taxes	AU$1,610.84

Different cost allocation will engineer different P/L results.

"From 5 April 2012, Qantas will also increase the fuel surcharge for Qantas Frequent Flyer Classic Award redemption tickets by $4 for domestic travel (from $12 to $16) and by $10 for Trans-Tasman flights (from $20 to $30).

Jetstar will also increase fares on some routes within both its Singapore and Australian markets, as well as some service charges, in response to higher fuel costs."

About Qantas - Media Room - Media Releases - QANTAS RESPONDS AGAIN TO FUEL PRICES

 

[ajw373]

Not sure what your post above is on about. If you want an apples for apples comparision how about showing JQ SYD-MEL and QF SYD-MEL, rather than JQ SYD-MEL and QF SYD-FRA.

Also it seems you are somehow implying that Qantas international in particular is picking up the tab for carbon tax from Jetstar. None of your 'evidence' above even implies this. Alos just because Jetstar doesn't break down surchrages like Qantas doesn't mean it doesn't recover the cost. As I said in a post before at the end of the the fare, including the cost of surcharges, passeneger charges, carbon tax etc should be it. No other business break down costs like this so why airlines. The only things that should be seperate are options the passenger has a choice with.

 

[medhead]

Some posts discussing general issues in relation to Carbon Tax have been moved:

http://www.australianfrequentflyer.com.au/community/open-discussion/carbon-tax-29438.html
​

Please stick to Aviation issues specifically in relation to Carbon Tax here.

Oops sorry, I think I might have got confused between the threads.

 

[RAM]

Not sure what your post above is on about (Pointing out the Q is not playing apples with apples in treatment of fuel surcharge and carbon tax -RAM). If you want an apples for apples comparison how about showing JQ SYD-MEL and QF SYD-MEL, rather than JQ SYD-MEL and QF SYD-FRA.

Also it seems you are somehow implying that Qantas international in particular is picking up the tab for carbon tax from Jetstar(Well if Q says that - Charging additional on ALL Q flights but only some Jetstar flights - that is exactly the evidence needed off Q's web site - that's normally called an admission - RAM). None of your 'evidence' above even implies this. Also just because Jetstar doesn't break down surcharges like Qantas doesn't mean it doesn't recover the cost. As I said in a post before at the end of the the fare, including the cost of surcharges, passenger charges, carbon tax etc should be it. No other business break down costs like this so why airlines (Well why does Q put it separate to the "fare" but Jetstar is not? So an award booking is significantly more expensive (not worth it) with Q and further sees patronage fall, Q Mgmt is being inconsistent within its own operation - WHY? - RAM). The only things that should be separate are options the passenger has a choice with (I could not agree more with you, and so would most travel agents who don't get commission on tax/surcharge component - so no wonder they flog Jetstar more than QI if they can as actually greater commission from Jetstar's cheaper overall tickets - HMMM - RAM).

To look at the point you want here is JQ vs Q dep July 20 rtn July 27.

Commission based on JQ fare of $1,285.62 ($617.81+$667.81) vs Q of $1,129.00 ($564.50+$564.50) - commission not based on total cost including surcharges & taxes which make Q $200 more expensive.

So Q engineers the result it wants, TAs prefer JQ on commission basis, FFs get much cheaper classic awards (not mega tax&surcharge addon to points), and QI looks a dog from profitability to get the result that Q Mgmt want.

Interestingly enough the carbon tax should have been higher for the JQ flight!!!! Based on the actual scheduled aircraft for both Q and JQ


Mileage

• 10148 total miles

CO2 emissions

• 2976 lbs (estimated by ITA) for JQ
• 2868 lbs (estimated by ITA) for Q

Not exactly what a passenger may have thought looking at the detailed fare break up is it? Fly Q for lower carbon generation - how's that for a new ad campaign?

Time for less spin and more actual analysis of the facts. Also time for Red Roo to put in an appearance I would have thought? To quote that immortal line "Please explain."

Fare 1: Carrier JQ NHOW2 SYD to HNL Passenger type ADT, one-way fare, booking code N Covers SYD-HNL (Economy)	AU$617.81
Fare 2: Carrier JQ OHOW2 HNL to SYD Passenger type ADT, one-way fare, booking code O Covers HNL-SYD (Economy)	AU$667.81
US International Arrival Tax (US)	AU$17.00
Australian Int'l Passenger Service Charge (WY)	AU$25.92
Australian Passenger Movement Charge (AU)	AU$55.00
US Customs Fee (YC)	AU$5.60
US Immigration Fee (XY)	AU$7.10
USDA APHIS Fee (XA)	AU$5.10
US September 11th Security Fee (AY)	AU$2.60
US International Departure Tax (US)	AU$17.00
Australian Int'l Passenger Service Charge (WY)	AU$25.92
Subtotal per passenger	AU$1,447.24
Number of passengers	x1
Total airfare & taxes	AU$1,447.24

• This ticket is non-refundable.
• Changes to this ticket will incur a penalty fee.
• No changes may be made to this ticket after departure.

Fare construction

SYD JQ HNL 607.17NHOW2 JQ SYD 656.31OHOW2 NUC 1263.48 END ROE 1.017522 XT 55.00AU 51.84WY 5.60YC 7.10XY 5.10XA 34.00US 2.60AY

And for Q

Fare 1: Carrier QF NKHNL SYD to HNL Passenger type ADT, round trip fare, booking code N Covers SYD-HNL (Economy)	AU$564.50
Fare 2: Carrier QF NKHNL HNL to SYD Passenger type ADT, round trip fare, booking code N Covers HNL-SYD (Economy)	AU$564.50
(YQ)	AU$350.00
QF YR surcharge (YR)	AU$30.00
USDA APHIS Fee (XA)	AU$5.10
US Immigration Fee (XY)	AU$7.10
US Customs Fee (YC)	AU$5.60
Australian Passenger Movement Charge (AU)	AU$55.00
Australian Int'l Passenger Service Charge (WY)	AU$25.92
US International Arrival Tax (US)	AU$17.00
Australian Int'l Passenger Service Charge (WY)	AU$25.92
US International Departure Tax (US)	AU$17.00
US September 11th Security Fee (AY)	AU$2.60
US Passenger Facility Charge (XF)	AU$4.60
Subtotal per passenger	AU$1,674.84
Number of passengers	x1
Total airfare & taxes	AU$1,674.84

• This ticket is non-refundable.
• Changes to this ticket will incur a penalty fee.

Fare construction (can be useful to travel agents)
SYD QF HNL 554.77NKHNL QF SYD 554.77NKHNL NUC 1109.54 END ROE 1.017522 XT 55.00AU 51.84WY 5.60YC 7.10XY 5.10XA 34.00US 2.60AY 350.00YQ 30.00YR 4.60XF HNL4.50

 

[Moody]

RAM - you have made your point. I won't say endlessly because that would be a exaggeration.

I suppose the title of this thread could be considered a nonsense, akin to saying "Qantas sticking to charging passengers for fuel". They have no choice but to pay the carbon tax on the pollution they generate. What they do have a choice about is whether they will do anything about it, and if they weren't then the shareholders would be looking for a new board. They other thing they have a choice about is the airfares they charge and how they dress them up. As ajw373 said, the fare is the fare. It only makes sense to split out the items when there is some financial/legal reason to do so, but many airlines (Qantas included) like to quote a base fare and then add the +++ as if they were optional or not part of doing business.

Whether Jetstar also plays this game is irrelevant, and if Qantas international is paying for the Jetstar carbon tax then I think there will be serious legal ramifications for them. I doubt this is happening.