The airline announced this afternoon that it had raised its fuel surcharge on Australia-Europe flights from $98 one-way to $185 one-way, or $370 return.
The fuel surcharge on flights to the US and Canada, South America, South Africa and India will increase from $98 one-way to $145 one-way. Services to Asia, the Pacific and Honolulu will attract fuel surcharges of $115 one-way, up from $98, while flights to New Zealand will incur surcharges of $65, up $9 from the previous levy. Qantas executive general manager John Borghetti said domestic fuel surcharges would not change. He said record high fuel prices continued to have a significant impact at Qantas. Mr Borghetti said that when the airline first introduced surcharges in may 2004, crude oil cost around $US40 a barrel. "Since then, prices have nearly doubled and the benchmark Singapore jet fuel price has increased from $US 44 a barrel to around $US90 a barrel.
The national carrier's earnings slumped more than 30 per cent in the 2005/06 financial year, dragged down by a $2.9 billion fuel bill.
With the bill set to grow, Qantas chief executive Geoff Dixon said the levy would be raised either today or tomorrow.
The 45 percent jump in the 2005/2006 fuel bill to $2.8 billion had pushed profit down 30 percent to $480 million, he said.
The international surcharge is currently $98, having risen in several increases from May 2004 when it was introduced at $15. The domestic fee is $31.
And there may be more financial pain ahead for travellers with Mr Dixon predicting that the 2006/2007 fuel bill would reach nearly $4 billion, even allowing for hedging.
"The next year will be tough," he said.
To survive Qantas would have to shed significant jobs over the next two years, including 1000 management and support positions.
And it would consolidate its businesses to better pursue general freight market opportunities as they arose.
Mr Dixon said the year's financial outcome included $104 million in liquidated damages from European manufacturer Airbus due to the delayed delivery of the A380.
Airbus had indicated the first of the double decker planes would arrive in October next year and despite the delays Qantas was confident about the aircraft which would be the "main stay of our long haul operations for many years to come."
Mr Dixon said he remained perplexed why the Federal Government insisted that 51 percent ownership of Qantas stay in Australian hands.
"I do not believe that it is hugely important that this continue," he said. "Qantas would not be less Australian.
"Is the Holden or Vegemite any less Australian for being overseas owned?"
