Qantas to increase fares

[Reggie]

Qantas to increase fares

Qantas to increase fares

Qantas says it will increase its airfares for domestic and international flights and suspend its share buyback program due to ongoing increases in the cost of jet fuel.

But the national carrier says that while the 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 three per cent.

Its low-cost offshoot Jetstar is reviewing its fare levels.

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

 

[JohnK]

This is getting beyond a joke. How can you justify airfare increases due to rise in fuel costs when you already have a fuel surcharge in place to cater for this situation? The sooner the ACCC or the government step in and abolish this practice the better.

And by the way I do understand that I will have to pay more for my airfare due to rising fuel costs. I object to the way it is handled by the majority of the airlines. The cost of crude is not likely to return to US$40/barrel anytime soon. Time to get rid of fuel surcharges and incorporate all fuel costs into the base airfare....

 

[oz_mark]

This is getting beyond a joke. How can you justify airfare increases due to rise in fuel costs when you already have a fuel surcharge in place to cater for this situation? The sooner the ACCC or the government step in and abolish this practice the better.

And by the way I do understand that I will have to pay more for my airfare due to rising fuel costs. I object to the way it is handled by the majority of the airlines. The cost of crude is not likely to return to US$40/barrel anytime soon. Time to get rid of fuel surcharges and incorporate all fuel costs into the base airfare....

The price of fuel has increased substantially since the last change in fuel surcharges. Given that, I see they had two alternatives:

1) Raise the base fare - which is what they have done
2) Raise the fuel surcharge.

We have been complaining about them using surcharges as they are an operational expense. Now they raise the base fare, you still complain?

 

[JohnK]

We have been complaining about them using surcharges as they are an operational expense. Now they raise the base fare, you still complain?

Have they incorporated fuel surcharges into the base airfare? So it is OK to increase the airfare due to rising fuel costs but leave the fuel surcharge in place. And when they increase the fuel surcharge again the month after we will just accept it because of continuing rise in fuel costs.

I will still maintain my stance that all fuel surcharges need to be absorbed into the base airfare. Until that happens I will continue to complain.

 

[Platy]

We have been complaining about them using surcharges as they are an operational expense. Now they raise the base fare, you still complain?

Why complain? Perhaps, because..

...they are using fuel increases as an excuse to raise the base fare!

...the fuel surcharges should be included in the ticket cost and not promoted as a "tax", which is misleading and dishonest practice!

...the fuel surcharges are levied against frequent flyer redemption flights with pathetic excuses as justifications!

...service levels are declining despite increasing costs of tickets!

...low cost airline service is masquarading as full service when you are charged QF prices and/or redemption rates for Deathstar flights on codeshare flights!

..when fuel costs did go down the fuel surcharges did not go down for months!

..fuel surcharges were being levied at a time when QF had significant cost hedging costs being passed onto customers did not reflect real additional costs, customers were being ripped off!

...travel agents are being ripped off since the fuel surcharge is not included in their commission!

 

[simongr]

And now QF are moving to increase the base fare to factor in fuel price increases which is starting to address all your points...

 

[oz_mark]

Ideally, all the fuel surcharges should be in the ticket price, but they weren't. Now, instead of increasing the surcharge they have recognised that prices won't go back to their old levels, they are addressing those concerns.

With fuel at the current prices it was going to be one or the other. While it should not have got to this point, it would be a stretch to expect them to move the whole lot into the base fare in one go now.

 

[Platy]

While it should not have got to this point, it would be a stretch to expect them to move the whole lot into the base fare in one go now.

Indeed. I totally agree.

Although I can't imagine QF would actually remove the fuel surcharge and put it in the ticket price since it would no longer allow them to price gouge frequent flyers redeeming award flights (I'm looking at taxes/charges of $78 for a CNS-(BNE)-ROK one way) or fiddle commissions to travel agents.

Unless, of couse, the ACCC finally lost their milk teeth in favour of some adult fangs!

 

[JohnK]

And now QF are moving to increase the base fare to factor in fuel price increases which is starting to address all your points...

No. There is still a very sizeable fuel surcharge that needs to be addressed before we jump for joy that QF are increasing the base airfare rather than adding further to the ridiculous fuel surcharge. This issue will only cease to be discussed when fuel surcharges are totally removed, including for FF award redemptions, and included wholly in the base airfare.

I am sure this latest ploy has nothing to do with increasing profit, by the way nothing wrong with that, and ensuring that executive salaries remain high considering the uncertainty that most companies are currently experiencing worldwide.

 

[jaffa]

I think Qantas knows it's right on the edge re these fuel surcharges with the ACCC.
Who by the way have been threatening to take action now for over a year.

I think by Qantas increasing the base fare and leaving the fuel surcharge untouched they think it will maintain the status Quo and not bring down more ire from the ACCC.

The difference today is the new Rudd Government is tending to move towards the ACCC view on this rather than the previous Howard shambles.

I think QANTAS don't want to rock the boat which is why we are seeing it done this way. They are afraid of being pushed l think, and the ACCC is just waiting for the justification to force this onto the Government table once and for all.

QANTAS will drag this out for as long as they possibly can.

I am sure it is costing QF more to administer the separate surcharges and am pretty bewildered why it all is not just one fluctuating base fare which would be a much easier sell to the public than the plus this plus that plus, plus scenario.

JMHO.......

 

[Mal]

The increase in base fares is a political ploy and I believe it ties into recent announcements about inclusive pricing and community outrage over 'fuel fines'.

Qantas now has things both ways. They can increase their base fares because of fuel prices, and increase their surcharge due to fuel prices. They should roll it all into the base fare.

I've mentioned before, and still believe it will happen that Qantas will drop fuel surcharges completely this year - probably at the same time as the shakeup for FF redemptions. Time will tell if my prediction is correct or not.

 

[jaffa]

Mal,

What leads you to that impression??

I did a search but could not find your previous comments!

 

[Mal]

What leads you to that impression??

I've mentioned it a couple of times:
http://www.frequentflyer.com.au/community/155695-15-post.html
http://www.frequentflyer.com.au/community/155696-18-post.html

My views aren't based on any inside information, but more perception of the political situation around the place.

 

[oz_mark]

Virgin Blue joins in

Virgin raises airfares to offset costs | The Australian

VIRGIN Blue has followed Qantas and raised airfares to help offset an unprecedented rise in the cost of jet fuel.

The airline said one-way fares on Virgin Blue domestic flights will rise by between $5 and $10, based upon flight-sector length.

Fares for short-haul international flights and trans-Tasman journeys branded under the Pacific Blue carrier will increase by between $5 and $15.

 

[JohnK]

Anyone who really thinks that DJ and QF are competiting against one another think again.

Collaborate....