Qantas hikes fuel surcharges as oil price rises

Qantas has announced that fuel surcharges will increase from next week. Photo / Sarah Ivey

Qantas has announced that its international fuel surcharges will increase again next week as continuing political instability in the Middle East impacts the price of oil and jet fuel.

One-way fuel surcharges for transtasman and Pacific-region flights are set to rise by A$30 (NZ$41) to A$105, while those travelling to the Americas and India will see increases of A$35 and those heading to the UK and mainland Europe will see increases of A$45.

Qantas Chief Executive Officer, Alan Joyce, said oil and fuel prices remained an increasing concern for the aviation industry.

"Due to a range of factors... prices have moved upward sharply in recent months," Mr Joyce said.

"This prompted, last month, our first increase in international fuel surcharges since January 2008, as well as modest increases in domestic, regional and Tasman fares of up to five per cent.

"Since then, jet fuel prices have increased by a further 12 per cent, to more than US$131 per barrel today.

"This increased cost to our capital intensive business is something we, and other airlines, have to manage very carefully via hedging activities as well as surcharge and fare increases.

He said the latest price increases, which will apply to tickets issued on or after March 17, will still not cover the full impact of the most recent hikes to jet fuel prices.

"Fuel costs for the Qantas Group in the second half of this financial year are now expected to rise to A$2 billion."

Mr Joyce said Qantas would continue to closely monitor oil and fuel prices and respond accordingly.

"Our international surcharges and domestic, regional and Tasman fares remain under review, and further increases will be considered if necessary," he said.

A spokesperson for Air New Zealand confirmed the airline was also reviewing its fares in light of the continued rise in the cost of jet fuel.