Qantas ups fuel surcharge on tickets
SYDNEY, Australia (Reuters) -- Qantas Airways Ltd., Australia's biggest airline, has increased its fuel surcharges as record oil prices threaten its earnings.
The announcement comes a day after discount airline Virgin Blue Holdings Ltd. said it was raising its fuel surcharge.
"Based on current prices the Qantas Group will spend approximately Aust.$1 billion ($769 million) more on fuel in 2005/06 compared to the current financial year," Chief Executive Geoff Dixon said in a statement on Friday.
Even with the higher surcharges and hedging of fuel prices, Qantas would still be left around Aust.$400 million short, Dixon said.
U.S. crude oil futures hit a record high above $58 a barrel early this week. Goldman Sachs analysts have forecast that crude could eventually spike to $105 as global demand strains supply.
Last month, Virgin Blue said its 2006 profit would be slashed by around $70 million after tax if current record aviation oil prices persisted.
Qantas has 45 percent of its fuel needs hedged in 2006 at $45 a barrel. Virgin Blue has no hedging for 2006 and the company's chief executive, Brett Godfrey, said on Thursday that were fuel prices to stay at current levels, the airline's fuel bill this year would be A$165 million more than in the previous 12 months.
Effective April 20, the Qantas surcharge on domestic travel in Australia and New Zealand will rise Aust.$$8 to Aust.$$20 a sector.
For travel across the Tasman Sea to New Zealand, it would rise Aust.$11 to Aust.$40, and is set to increase Aust.$31 to Aust.$60 a sector for other international travel.
Qantas discount airline Jetstar will lift its surcharge to Aust.$19 from Aust.$10 a sector.
Virgin Blue surcharges increased to Aust.$19 from Aust.$10 a domestic sector, while the surcharge on its international carrier Pacific Blue rose to Aust.$35 from Aust.$20 a sector.
Transport group Patrick Corp. held a 62.4 percent stake in Virgin Blue after its Aust.$1.90-a-share takeover bid closed a week ago. Richard Branson's Virgin Group held 25.57 percent.
