Qantas to Remove Domestic Fuel Surcharges

Sydney, 30 December 2008

Qantas announced today it would remove its domestic fuel surcharges for tickets issued on or after Thursday 1 January 2009.

Executive General Manager, Mr John Borghetti, said the airline had reduced domestic and international twice in recent months.

"When we reduced surcharges last week, we said we would closely monitor the situation," Mr Borghetti said.

"We are responding today, with the removal of the $18 per sector fuel surcharge that applied to all Qantas domestic and QantasLink bookings.

"Based on the higher fuel costs associated with our international operations, international surcharges will remain. They have been reduced twice since October and will remain under review."

Mr Borghetti said that despite recent falls in the price of oil, Qantas' fuel costs were still greater than when surcharges were first introduced in May 2004.

"Fuel remains a major cost to our business and, even with surcharges, we have absorbed significant amounts of the additional record fuel costs incurred in recent years," he said.

"Prices remain volatile. Oil was trading as low as US$32.40 a barrel on 19 December, but today back up to US$40 a barrel, an increase of more than 20 per cent.

"Jet fuel refining margins paid by airlines are also higher. The margin, which was around US$5.40 in May 2004, is approximately US$17 today."

Despite lower price, the Qantas Group's 2008-09 fuel bill will still be $400 million higher than last financial year.

Issued by Qantas Corporate Communication (3871)