Steve Creedy, Aviation writer | September 10, 2008
QANTAS has refused to follow the lead of Singapore Airlines, which yesterday lowered its fuel surcharge on tickets in response to falling jet fuel prices.
Consumer advocates warned that Qantas risked alienating more customers if it failed to reduce its fuel levy.
Singapore announced yesterday it would immediately reduce ticket prices by up to $US10 ($12.40) on short- and medium-haul flights after the recent easing of jet fuel prices.
The move reduces the airline's fuel surcharge on a flight between Australia and Singapore from $US110 a sector to $US100.
The decision came after jet fuel fell from a high of $US181.45 on July 3 to about $US125 a barrel. Oil prices have also fallen, from a high of $US147 in June to $US105.50 last night.
Spokesman for Australian consumer group Choice Christopher Zinn said last night that some surcharges were slapped on quickly and at short notice as fuel prices were rising. "Now it's coming down, we would expect reductions to be passed on where possible," Mr Zinn said.
He said consumers could see that fuel prices had dropped at the pumps and their patience might be stretched if airlines did not pass on the savings.
"It's incumbent on (the airlines) to come to the party or give a pretty good reason why not," he said. "We'd just say in a competitive market consumers should chase the best deal."
Centre for Asia Pacific Aviation executive chairman Peter Harbison also urged Qantas to follow suit. "With Qantas sitting on a fairly good hedging position, there is every reason they should be doing the same, particularly with the likelihood that fuel prices will continue trending down," he said.
But Qantas said yesterday it had no plans to make any immediate cuts and it would continue to monitor the situation. "The price of oil remains high with no signs of stability; it's a volatile market," a Qantas spokesman said.
"So at the current pricing, with our fuel-hedging measures in place, the Qantas fuel bill is going to be $1.5 billion higher this year than the previous financial year."
The nation's second-biggest carrier, Virgin Blue, did not rule out a cut but said it was looking for some stability in the market.
"We're reviewing our position and will come to a decision shortly," a spokeswoman said.
Qantas last announced a change to its fuel surcharge on January 7, when it raised it between $10 and $25 per flight. Crude oil at that stage was $US95 a barrel while yesterday it was more than $105 per barrel.
Qantas has since announced two increases in base fares. These boosted international fares by 3per cent in May and a further 4per cent in June.
Virgin Blue last increased fuel surcharges on February 1, boosting the domestic levy from $19 to $24 and the international surcharge from $35 to $45.
But it also has since increased base fares, boosting international tickets by between $5 and $15 on May 6, and announcing in July that it would increase about half its fully flexible fares by 5 per cent. It has also started charging between $8 and $20 for up to 23kg of checked luggage.
The nation's biggest independent regional carrier, Regional Express, is one of the few other carriers to have reduced fuel surcharges. It announced in late July that it would reduce the levy by $4 a flight from August 1.