Qantas to Increase Fuel Surcharges

Sydney, 26 April 2006

The Qantas Group said today that it would increase its domestic and international fuel surcharges in response to continuing record crude oil and jet fuel prices.

The new surcharges, for tickets issued in Australia on or after 5 May 2006, will be:

- Qantas Australian and New Zealand Domestic
$31 incl GST ($5 increase)
- Jetstar Domestic
$24 incl GST ($5 increase)
- QantasLink (jet services)
$31 incl GST ($9 increase)
- QantasLink (turboprop services)
$29 incl GST ($7 increase)
- Qantas trans-Tasman
$56 ($10 increase)
- Jetstar trans-Tasman
$45 ($10 increase)
- Qantas and Australian Airlines International
$98 ($23 increase)

The Executive General Manager of Qantas, Mr John Borghetti, said the cost of fuel remained a critical issue - not only for Qantas, but across the airline industry.

"We introduced our first fuel surcharges in May 2004, when crude oil was trading at US$40 a barrel," Mr Borghetti said.

"Since then, oil prices have nearly doubled and the benchmark Singapore jet fuel price has increased from US$44 a barrel to more than US$88 a barrel.

"Our 2005/06 fuel bill is expected to be around A$2.9 billion, and on current forecasts, approximately A$3.9 billion in 2006/07 after hedging.

"While we have hedged the crude oil component of our 2005/06 fuel cost at around US$56 a barrel, the unprecedented increase in the price of jet fuel means the Group's fuel bill will have risen by around A$1 billion after hedging, compared to 2004/05.

"Our fuel surcharges, including this latest increase, will only partially offset some of this very significant additional cost."

Mr Borghetti said Qantas would continue to closely monitor the surcharges and their impact on demand.

The surcharges apply to each flight/sector shown on a ticket.

Issued by Qantas Corporate Communication (3425)