Qantas to increase fuel surcharge on Emirates partner flights

[Melburnian1]

Dropping fuel surcharges will have no impact on the entry level commercial fares these are set already based on supply and demand including the surcharge - except for the fares at the more inelastic end of the market anyway.

Wouldn't dropping or decreasing fuel surcharges give a 'first mover' airline a competitive advantage that they would be able to decrease fares and hence stimulate demand at all price points and classes of service?

 

[dajop]

Wouldn't dropping or decreasing fuel surcharges give a 'first mover' airline a competitive advantage that they would be able to decrease fares and hence stimulate demand at all price points and classes of service?

What are the fares that fuel surcharges are genuinely imposed on? Definitely RTW fares. Definitely awards. Maybe corporate rates? Other than that fares seem to be set inclusive of fuel surcharges.

We have real life, very current example in MH. They didn't alter fuel surcharges at all, but didn't need to. They have reduced fares across the board in attempt stimulate demand for the airline, and bring cash into the airline. At the same time maintaining fuel surcharges so still getting them from people booking RTW cash tickets and points based award tickets.

 

[Mattg]

Any point in contacting the ACCC? Or perhaps 'the checkout" guys on the ABC.

I was wondering the same thing. Surely these so-called "fuel surcharges" should actually reflect the cost of fuel in some way? I just don't see how they can justify a higher fuel surcharge on SYD-CGK than SYD-DXB. Maybe it would be a good thing if the ACCC got involved as these continuous increases in fuel surcharges are unjustified and frankly misleading.

 

[whatmeworry]

Senator Xenophon wrote to the ACCC last year. Nothing done.

"I am concerned that there is a disproportionate impact on customers, who may be being charged unfairly high fees," he said in the letter.
"Further, I query whether customers are being misled in that context.
"I would be grateful if you could consider using the powers available to you to require Qantas and other airlines to substantiate their claims that the fuel surcharge is needed to recover their additional fuel charges."
Flight Centre managing director Graham Turner lashed out at fuel surcharges on Thursday, saying recent reductions had seen fuel prices fall to their lowest levels in more than year and should prompt airlines to lower the levies and change their complicated fuel surcharge structure.
The travel company found that fuel prices had tripled since modest surcharges were first introduced in 2004 but that the levy had typically been raised by many times that amount.
It said Qantas's current $760 surcharge on a return flight to London was more than 12 times its initial surcharge of $60 and the levy had not dropped since March, 2009.
Fuel surcharges also varied from airline to airline with Flight Centre's analysis showing British Airways charges $763, Malaysia Airlines $590, Virgin Atlantic $580, Singapore Airlines $571 and Cathay Pacific $532 on flights between Australia and London. It said Air New Zealand did not have a fuel surcharge and Qantas partner Emirates had "a relatively small fee".
Cookies must be enabled. | The Australian

ACCC investigating Qantas and Virgin over not lowering prices with the repel of the Carbon tax.

The consumer watchdog is looking into whether Australia's two biggest airlines have misled customers about the impact of the carbon tax on airfares.

In recent months, Qantas and Virgin Australia have said the axing of the carbon price won't automatically result in cheaper tickets.

That is despite both airlines previously telling customers that the tax would force them to raise prices.

In its latest update on the consumer impact of the carbon tax, the ACCC (Australian Competition and Consumer Commission) says the airlines' claims warrant further investigation.

PM - ACCC sets sights on Qantas, Virgin carbon claims 29/07/2014

 

[Kangol]

Isn't YQ technically a "carrier surcharge"? ie. including, but not limited to, a fuel surcharge?

 

[Fantic125]

So it's not just because having a lardarse like Tony Hancock on board doubling their fuel bill (and quadrupling their alcohol bill) that they've had to increase prices? ;-)

 

[vitagen]

Quadruple is an understatement....

 

[medhead]

The thing you're all missing is that fuel only becomes more expensive, no matter how much the price decreases. Now that the A$ is decreasing that will offset the cheaper price of the fuel (in US$) making fuel more expensive. Thus leading to an increase in fuel surcharge.

 

[JohnK]

Haha. Funniest comment I've read in ages. Drop fuel surcharges when price of fuel goes down. Hilarious. ;-)

To be fair they did reduce the fuel surcharges a few years back when airfares were really low.

And I know we have this argument all this time but someone earning their points flying should not be paying fuel surcharges on award tickets. And yes I am opening a can of worms excluding those harvesting points via other means.

 

[medhead]

Or just devalue the points to cover the fuel surcharge. Oh, they did and still we pay a fuel surcharge.

Wonder when the award cost is going to decrease to match the new distance zones.

 

[Mattg]

Wonder when the award cost is going to decrease to match the new distance zones.

Agreed... That only seems fair.

 

[marki]

Will the fuel surcharge be dropped now ?? More relief should be in store for motorists following the slump in global oil price to as low as $US63.72 a barrel this week.

I was hoping passengers would get cheaper tickets?

 

[BAM1748]

Would appreciate Red Roo giving some back ground to how the QF fuel surcharge is linked the actual fuel cost.

Just a simple explanation is sufficient.

Matt

 

[marki]

Love an simple explanation too ditto

 

[codash1099]

Would appreciate Red Roo giving some back ground to how the QF fuel surcharge is linked the actual fuel cost.

Just a simple explanation is sufficient.

Matt

I certainly don't see how they can have a surcharge on a flight where they aren't paying for the fuel in the first place.

 

[medhead]

There was a pretty good outline of this in the SMH today. Can't do a link right now as battling Sydney storm. But IIRC taking account of currency movement fuel (jet fuel) has decreased 27%. The fuel surcharge is estimate to only collect about 20 to 40% of qantas' fuel cost. There where a few other good numbers. I'll dig out a link when out of the rain

 

[hossein_au]

There was a pretty good outline of this in the SMH today. Can't do a link right now as battling Sydney storm. But IIRC taking account of currency movement fuel (jet fuel) has decreased 27%. The fuel surcharge is estimate to only collect about 20 to 40% of qantas' fuel cost. There where a few other good numbers. I'll dig out a link when out of the rain

Well, what do you think of this then:

Qantas CFO Gareth Evans said yesterday (as published in Australian Business Traveller, 2 Dec 2014):
"The impact (of lower fuel prices) in the first half is going to be about $20 million, that's the Aussie dollar price benefit driven by fuel."

"Lower fuel prices is more of second-half [January-June 2015] issue than a first half issue – the price benefit to us in the first half is going to be relatively modest".

"The dollar's been lower for pretty much the whole period than it was in the previous year but fuel prices really only started to drop dramatically from October, which prices November, so really we're only getting a benefit for a couple of months in the first half of the [fiscal] year."

"But if the fuel price stays where it is at the moment then there's a bigger benefit in the second half."

 

[medhead]

Well, what do you think of this then:

Qantas CFO Gareth Evans said yesterday (as published in Australian Business Traveller, 2 Dec 2014):
"The impact (of lower fuel prices) in the first half is going to be about $20 million, that's the Aussie dollar price benefit driven by fuel."

"Lower fuel prices is more of second-half [January-June 2015] issue than a first half issue – the price benefit to us in the first half is going to be relatively modest".

"The dollar's been lower for pretty much the whole period than it was in the previous year but fuel prices really only started to drop dramatically from October, which prices November, so really we're only getting a benefit for a couple of months in the first half of the [fiscal] year."

"But if the fuel price stays where it is at the moment then there's a bigger benefit in the second half."

Pretty much matches words in the SMH story, which is in the Business section, rather than ABT.

Too early for Qantas to slash its fuel surcharge, analyst says

It goes on to say:

The airline expects only a $20 million benefit from the lower oil price in the first half of the financial year because of its fuel purchases timing. But in the second half, it will have exposure to 70 per cent of any fall in the fuel price, which could amount to hundreds of millions of dollars of savings from last year's record fuel bill of $4.5 billion.

and

By contrast, Mr Crowe said a 30 per cent fall in the Australian dollar jet fuel price would eventually save Qantas $1.4 billion if it could be sustained for a full year.

So I guess I think ABT start well but could've finished better.