Qantas Airfares Set To Rise

[peter991]

Qantas airfares set to rise

Monday, April 28, 2008

Qantas will increase airfares sold in Australia for domestic and international flights by 3.5 and 3 per cent respectively from May 9.

In an effort to minimise the impact of fuel prices Qantas will reduce overall costs, including a hiring freeze and cutting back on non-essential spending as well as suspending it share buyback program.

The national carrier has stated that while rising fuel prices have been 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.

The airline's low cost offshoot Jetstar is currently reviewing its fare levels. Proposed increases to Qantas fares sold outside Australia are also under consideration.

Qantas chief executive Geoff Dixon said the group's fuel hedging program, its two brand strategy and efficiency gains from its sustainable future program to had enabled it to manage higher fuel costs to date.

"The continuing rise of jet fuel prices is of concern, however we have hedged 34 per cent of our 2008/09 needs at a price of $US90 ($96) per barrel," he said.

Qantas said the majority of its hedging is in the first half of the fiscal year and is predominantly in the form of options contracts.

"But if high fuel prices persist beyond this point it would be of increasing concern," Mr Dixon said.

"An increase in base fares is now necessary to partially bridge the widening gap between the actual increase in the cost of fuel and the amount we offset through surcharges or non-fuel cost improvements," he said.

"We will continue to monitor fare and surcharge levels and review our network and schedule to optimise capacity."

Mr Dixon said that due to fuel price volatility the group believed it was prudent to suspend an on-market share buyback program, which began last September.

The group has so far returned more than $500 million to its shareholders.

"We remain confident of meeting our guidance for a 2007/08 result of at least 40 per cent higher than the 2006/07 reported profit before tax," Mr Dixon said.

Peter

This article raises some interesting points:

1) How much of a price difference is there between buying a PER-BKK-PER fare in Perth (Australia) compared to buying the same fare and paying for it in Bangkok?

2) Cutting back on 'non-essentail spending' - is that accountant-speak for less maintenance / extended hours in the air before something is replaced?

3) With fuel prices set to keep rising (I am budgeting for $200 a barrel), why only hedge 34% of your needs?

[geriatrickid]

It's not so much the regular airfares but the removal of the special sales and promotions that's killing me. I was able to snag trips at US$1600 LAX-BKK and US$1800 SFO-BKK on EVA in Premium Laurel as late as last November and December, Those special promotions are now hovering at US$3300 with a special limited April sale on BKK-SEA at $2800. Even advance purchase economy seats have jumped 20% on EVA. I notice that the BKK routes in discount business have increased by close to $1000 on the BKK-JFK/EWR routes with economy up about $300. This is going to put a dent in the North American tourist visitors for sure. You guys in OZ are lucky as asia is practically in spitting distance so you won't be bled as badly.

[brizzle]

Same goes for BKK-LHR return fares. I cannot find anything much under 600 GBP for economy and 1500 GBP Biz .It is actually now cheaper to fly LHR-BKK return rather than BKK-LHR return.Apart from the odd special fare I have never known that in the past.

[tartempion]

I believe it was mentioned on this board that Etihad will raise fuel surcharge as of may first (3% increase on tickets?)

So I booked my next trip out of LOS to Europe in sept for a few pennies less than 35k, ticket valid 1 year.

Ticket I am on now is discounted, no date change allowed, cost a few pennies less than 30K.

Afraid also discounts might be history?

Curious to see if tickets can be found for less than 35k as of next month