QF Fuel Surcharges... May go down when fuel below $60/barrel for a month

[Mal]

Pain at pump eases | The Courier-Mail

"Qantas always leads the way in announcing surcharges but we never hear about them taking the surcharges back off," he said.

Qantas chief financial officer Peter Gregg said surcharges had been introduced in 2004 after the company had absorbed price rises for almost six months.

Fuel prices remained volatile and Qantas was still not recovering all increases.

"We would need to see a sustained reduction below $US60 a barrel (currently $US66 a barrel) for more than a month before we could even consider reducing surcharges," Mr Gregg said.

 

[admin]

More on this subject in today's Crikey.com newsletter. (This article is available at Crikey - Business)

Qantas keeps surcharge despite oil price drops

When is Qantas going to stop its outrageous price gouging of customers with the absurd oil price surcharges?

Qantas lifted domestic and international surcharges in late April and then the international surcharges again on August 18, after world oil prices peaked at $US78.40 in early August.

But oil prices have fallen sharply and closed under $US62 a barrel in New York overnight, the lowest level since the middle of March. In the meantime, Qantas's share price has exploded, jumping 20% in the past month alone -- $3.72 yesterday -- as oil prices have fallen 20%. Qantas's share price is now at its highest level since April.

There's nothing like a bit of price gouging to rebuild profits depleted by the impact of higher oil prices, rather than protecting the airline from higher fuel bills.

 

[Mal]

Yeah it's an interesting situation. Is Qantas going down the path of the "Ansett levy" where it is kept much longer than required to try and recoup money? While I can't find any direct quotes at the moment, I'm sure Qantas was annoyed at the Ansett levy hanging around too long.

There is no transperancy in fuel surcharges with Qantas at all. At least some other airlines (LA comes to mind) have a documented fuel surcharge regime ( Noticias ) where reducing fuel prices do affect the fuel surcharge within a month.

I think the Crikey article is right on the money. Fuel surcharges are a bit of a sham. The more fuel prices drop, the more they will be exposed.

 

[jakeseven7]

I reckon it will be very interesting to watch ALL carriers as the price drops...

I think it will be like when they go up, one carrier will make a loud noise about dropping the levy then all will be kind of forced to follow (regardless of their hedging - the average Joe Blogg wouldn't understand or care about that!)

 

[serfty]

IME, Hong Kong legislation (virtually being a barometer of these things) will amost certainly ensure we are aware of when such events are likely to occurr.

 

[JohnK]

I think the Crikey article is right on the money. Fuel surcharges are a bit of a sham. The more fuel prices drop, the more they will be exposed.

We all know that this "surcharge" has nothing to do with "fuel". Increases in fuel are a cost of operating a business and should be reflected in base price.

It would be a lot clearer if they renamed the "fuel surcharge" tax to "balance sheet adjustment surcharge" with a code of BS instead of YQ.

 

[bigjobs]

of course they will keep the charges in place as long as they can. it's a captive market.

besides, cheap oil prices don't mean much. the Reserve Bank will be putting interest rates up next month anyway. The drop in fuel prices guarantees this i reckon.

 

[oz_mark]

of course they will keep the charges in place as long as they can. it's a captive market.

besides, cheap oil prices don't mean much. the Reserve Bank will be putting interest rates up next month anyway. The drop in fuel prices guarantees this i reckon.

Why would that happen? Bananas will be coming down in price soonish removing all that inflationary pressure in the econom.

 

[ozstamps]

United has reduced some surcharges on some routes in the past week.

 

[bigjobs]

Why would that happen? Bananas will be coming down in price soonish removing all that inflationary pressure in the econom.

oh yeah ... of course ... banana's ... not our country's record personal debt levels that are increasing very rapidly coupled with the fact that there will now be more money in the economy cause of decreasing fuel prices and the fact that the government has no fiscal policy ...

nah, i'm with you, it's all about bananas ... :mrgreen: it's easier to blame the banana growers and the weather and guys named Larry

 

[Altair]

Well it will be interesting to see if the retoric regarding the "transperency" of the the fuel surcharge holds up. If they do not drop the the level then it clearly is a BS (or new terminology Statement of Financial Position ). I think they will keep it and answer the question by rattling of facts about how the levy is only covering a fraction of the actual increase....I can only wait to be "enhanced" by this....

 

[Lonely Flyer]

oh yeah ... of course ... banana's ... not our country's record personal debt levels that are increasing very rapidly coupled with the fact that there will now be more money in the economy cause of decreasing fuel prices and the fact that the government has no fiscal policy ...

Our economy is doing very nicely at the moment so that is pretty good for a Government without a fiscal policy or are you a Kiwi

 

[Kiwi Flyer]

It's not only airlines playing this game. Cab fares went up to reflect higher petrol prices. So far petrol price has fallen by nearly a third, yet cab fares are unchanged.

 

[NM]

It's not only airlines playing this game. Cab fares went up to reflect higher petrol prices. So far petrol price has fallen by nearly a third, yet cab fares are unchanged.

I have no problem with an increase in cab fares due to increasing costs. And I have no problem with an increase in airfares due to an increase in costs. I DO have a problem with trying to pass off the airfare increase as a "tax" or "surcharge". If the airlines feel they are not making enough money, then they have the right to raise their ticket prices - but just raise the fares and not try to pass it off as something it is not.

 

[Kiwi Flyer]

I have no problem with an increase in cab fares due to increasing costs.

Nor do I. But when the costs are reducing there should be an equal treatment, not just the cabbies benefitting from it.

And I have no problem with an increase in airfares due to an increase in costs. I DO have a problem with trying to pass off the airfare increase as a "tax" or "surcharge". If the airlines feel they are not making enough money, then they have the right to raise their ticket prices - but just raise the fares and not try to pass it off as something it is not.

Agree.

 

[bigjobs]

Our economy is doing very nicely at the moment so that is pretty good for a Government without a fiscal policy or are you a Kiwi

no i'm not - my wife is ... i understand that it's difficult to read tone into these posts. my tone was one of pure sarcasm.

you're correct we are enjoying some good times at the moment. I am involved in the mining industry so i am doing very well at the moment.

i reckon the average australian is pretty easy to convince during these good times. the last election was won on the basis that the government stated they could control interest rates ... the electorate basically believed them. even a basic understanding of the australian economy would be that we have a central bank that controls interest rates - not a government that does. Our government has no fiscal control, they gave it up years ago under Keating.

if we look at some of the projects that the mining/resource industry are wanting to get underway and can't at the moment because of costs spiralling upwards something has got to give eventually ...

 

[Standby]

unfortunately we are only one act of violent stupidity to reverse to common sense in oil pricing over the past month.
I agree the levy should be reduced but unlike the banks who move within hours of interest rate increases (also strangely slower to pass on reductions)The airlines moved around the $60 per barrel and again when it hit $70 so I see the point about having a month of stable prices.
I look forward though to the response of Woolies and Coles who have jagged up the price of groceries this year . The ave trolley of groceries-excluding Fruit and Veg ,has gone up significantly this year .A simple example is longlife milk which has increased from $1.15 to $1.40 since April.
Seems everyone is getting on the blame fuel for gouging senario.
We may have a duopoly with QF and DJ & you can choose to travel less
but Coles and Woolies know you really can't eat less..their tidy profits havent gone down as fuel has gone up
off the soap box now

 

[NM]

Nor do I. But when the costs are reducing there should be an equal treatment, not just the cabbies benefitting from it.

Was the increase based on the peak cost-base or was it to a point part way between the original cost and the peak?

In Australia, most cabs do not use petrol, but run on LPG. The LPG price has not been as volatile as the petrol price over the last year. I have not been monitoring the LPG prices recently. Have the peaked and now dropped as well?

Seeking input from our undercover cab industry representative

 

[Kiwi Flyer]

Was the increase based on the peak cost-base or was it to a point part way between the original cost and the peak?

In Australia, most cabs do not use petrol, but run on LPG. The LPG price has not been as volatile as the petrol price over the last year. I have not been monitoring the LPG prices recently. Have the peaked and now dropped as well?

Seeking input from our undercover cab industry representative

I dont know if current fares were set at the exact peak, however certainly at much higher petrol prices than currently (the last time petrol prices were this low is well before the latest increase in cab fares). In NZ few cabs have LPG or diesel.

 

[simongr]

I believe the NSW taxi fares are only revised annually and yes the prices went up at the time of pretty high fuel prices. I dont think the prices were jacked up because of the rise in petrol prices but it was factored into fare changes. I dont actually remember many cabbies coughing and moaning about fuel prices....