Qantas Cashing In On Hype : Fueltrac.
Qantas cashing in on hype: Fueltrac
May 13, 2004 - 4:05PM
A fuel-industry monitor said the nation's consumer watchdog should investigate the introduction of a fuel surcharge to the cost of Qantas fares.
On Tuesday, Qantas announced it would impose a surcharge on all domestic and international flights, citing a 60 per cent rise in jet fuel prices over the past year.
But Geoff Trotter, general manager of price-monitoring company Fueltrac, said the airline was cashing in on media hype surrounding the spiralling cost of crude oil.
He said that justifying a hike in the cost of plane tickets on a surge in the global price of oil was incorrect and misleading, and he called on the Australian Competition and Consumer Commission to investigate.
"It's a pretty good strategy within the current climate of record highs (in the price of oil) - but we are forgetting that the planes run on jet fuel and not regular crude oil," he said.
"While jet fuel prices have indeed risen over the past several years, the rise in the Australian dollar versus the US dollar has more than offset these increases.
"Most large purchasers of jet fuel in Australia buy this commodity in US dollars and Qantas is no exception".
Analysis from Fueltrac found the price of jet fuel in Australian dollars per barrel had actually fallen over the past 12 months.
Mr Trotter said he also questioned the legitimacy of the surcharge given that Qantas contracted fuel at a fixed price, which was not subject to short-term variations.
From Monday, passengers booking domestic flights on Qantas and its cut-price subsidiary Jetstar will be hit with a $6 one-way fuel surcharge.
A $15 one-way surcharge will apply to all international flights, including those on its budget carrier Australian Airlines.