Global Airport News
The increases, the third such move in 2011, were accompanied by fare rises and higher fuel surcharges on domestic routes and followed recently announced plans to scale back some flights and cut management jobs.
"The cost of jet fuel at the moment is the single biggest threat to our business since the global financial crisis," Qantas chief executive Alan Joyce told a business lunch after announcing the surcharge and fuel increases in a statement.
Qantas is not only struggling with rising jet fuel prices; its business has also been disrupted by natural disasters in key markets this year, including the Japan earthquake and tsunami, floods in Australia and an earthquake in New Zealand.
Joyce said Qantas would spend AUD$3.7 billion on fuel in 2010/11 (July/June), noting that additional fuel costs would not be recovered by the airline even after surcharges, hedging and fare increases.
"If these prices are sustained, next year's fuel bill will be hundreds of millions of dollars more," he said.
Qantas said its fuel bill for the second half of 2010/11 alone would be AUD$2 billion.
The airline has also estimated that the recent disasters will hurt its earnings by AUD$140 million.
Many carriers have been steadily raising fares this year as USD$100-a-barrel oil threatens profits just as airlines are recovering from the global credit crisis.
Qantas, which faces the threat of strike action by some workers over pay and conditions, also said it had reached an agreement with the Australian Services Union but said some demands by other unions were extreme and unacceptable.
