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

[jakeseven7]

Qantas obviously thinks many people will believe this

Not many people in the general population know/care.

If either DJ or QF cut their charge, the other will probably be forced to do the same, but it really comes down to how much is the airfare when the person wants to purchase it. Some of my family who only travel a couple of times a year haven't even noticed the increases and still are happy to score good deals when the airlines have there sales.

Employees who travel 99% on work don't care either (like me!). I'm not saying that everyone doesn't (and I agree with the principle that they should) but outside this forum its not a major issue.

 

[oz_mark]

Not many people in the general population know/care.

If either DJ or QF cut their charge, the other will probably be forced to do the same, but it really comes down to how much is the airfare when the person wants to purchase it. Some of my family who only travel a couple of times a year haven't even noticed the increases and still are happy to score good deals when the airlines have there sales.

Employees who travel 99% on work don't care either (like me!). I'm not saying that everyone doesn't (and I agree with the principle that they should) but outside this forum its not a major issue.

Agreed. And this is why the airlines will get away with it longer than they should Commercial pressure is the most likely cause that it will go down, no amount of consumer jumping up and down will make much difference.

 

[Altair]

And of course Qantas is quick to tell everyone why they can't reduce their surcharges:

Airlines reject call to drop fares | NEWS.com.au




Note of course no $ amount that fuel would have to drop to is being bandied around this time. I wonder why?

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....

Well it did not take long did it?
The fuel surcharge is being used to support their margins, look at the base fares they have either not moved or have gone down for specials. But I agree with most posters there is not too many in the public who care and would someone actually stop a holiday if the fuel surcharge went up when the total outlay could be in the $K's?

 

[Dave Noble]

With some tickets it does make a big difference . With QF only fares, one could just look at the total cost, however with other fares it starts making a very big difference to the price paid depending on where it is ticketed. In common tickets xONEx fares are of this nature. The fare is a general OW fare and then fining is dependant upon the issuing carrier.

Dave

 

[Altair]

With some tickets it does make a big difference . With QF only fares, one could just look at the total cost, however with other fares it starts making a very big difference to the price paid depending on where it is ticketed. In common tickets xONEx fares are of this nature. The fare is a general OW fare and then fining is dependant upon the issuing carrier.

Dave

I remember my first ATW ticket, self funded, straight after 9/11. With all the security taxes etc coming in they were 20% of the total ticket. It did not stop me from going as the airfare was only around 15% of my planned budget.

 

[oz_mark]

Oil plunges below US$60 a barrel

From NineMSN

Oil plunges below US$60 a barrel

Oil plunges below US$60 a barrel
Monday Sep 25 23:52 AEST

AP - Oil prices fell below $US60 a barrel for the first time in six months on Monday amid signs of growing petroleum inventories and after BP said it had permission to resume working the eastern half of Alaska's Prudhoe Bay oil field.
"Hedge funds and investors have been bailing out because geopolitical tensions have eased and they also realise that inventories are high during this period of seasonally weak demand at the end of summer," said Victor Shum, an energy analyst with Purvin & Gertz.
By midday in Europe, light, sweet crude for November delivery had fallen 90 cents to $US59.65 a barrel in electronic trading on the New York Mercantile Exchange.
Monday was the first time since March 13 that intraday trading had fallen below $US60 a barrel.

[..more..]

 

[Mal]

I think this PDF may be the one to watch as to the direction of fuel surcharges:

http://www.eia.doe.gov/pub/oil_gas/...troleum_status_report/current/pdf/table15.pdf

In particular for Qantas, I believe the Singapore Kerosene-Type Jet Fuel price is most relevant, but also I think the general trending of the Kerosene-Type Jet Fuel is also important. That will be the one that other airlines use in their justification (cough) for removing the surcharge eventually.

The prices for Singapore Jet Fuel seem to have declined back to March 2006 amounts, and are falling in line with the other petrol price drops. Qantas and their friends can run and hide for a little while, but eventually they will be forced to reduce or remove their surcharges.

 

[JohnK]

Qantas and their friends can run and hide for a little while, but eventually they will be forced to reduce or remove their surcharges.

Mal, that sounds like a great theory but I am having a lot of difficulty convincing myself that it is even a remote possibility of this occurring in real life. I wouldn't be surprised if fuel surcharges increase if/when oil prices start heading north again.

 

[StevePER]

The companies said surcharges would be maintained while oil prices were volatile and would not be dropped until the market stabilised significantly.

QANTAS is not placing much store by the recent dive in oil prices, having just boosted its fuel hedging level to 90 per cent of its needs for 2006-07 compared with 60 per cent when it announced its annual profit five weeks ago.

So that's the volatility taken care of... time to scrap the surcharge and roll the cost back into the fare where it belongs!

Steve

 

[coco50]

Rule of the marketplace #1: Prices are flexible in an upward direction but inflexible when it comes to moving down - especially in an oligopoly

 

[oz_mark]

Rule of the marketplace #1: Prices are flexible in an upward direction but inflexible when it comes to moving down - especially in an oligopoly

Yes. Just look how fast banks jack interest rates up when the Reserve announces an increase. Compare that to how slowly the decreases happen.

 

[Mal]

Air France has just reduced their fuel surcharge:
News 061005fuel
" Air France Reduces its Fuel Surcharge

Roissy, 5 October 2006

As the price of the barrel has remained below 65 dollars for 30 consecutive days, Air France, as promised, is withdrawing its most recent fuel surcharge increase, i.e. :

· 1 euro on domestic flights
· 2 euros on medium-haul flights
· 7 euros on long-haul flights

This decrease is valid on tickets issued in France as from 6 October 2006. "

 

[JohnK]

Air France has just reduced their fuel surcharge:

Now that is a positive move.

Anyone monitoring the price of fuel since QF promised to reduce surcharges? I am sure they will find a price somewhere in the world above $60/barrel to renege on the promise!

 

[simongr]

But look at the fuel surcharge that Air France were charging anyway - 1Euro????? that's about $1.3!

 

[Dave Noble]

But look at the fuel surcharge that Air France were charging anyway - 1Euro????? that's about $1.3!

No. It didn't say that. It said that it was removing its most recent fuel surcharge of €1 / €2 / €7 , not that this was the only surcharge that they had applied

That would still leave €8/€10/€41 surcharges I believe.

Even so, €41 ( approx AUD69.50 ) surcharge is still a hell of a lot less than QFs AUD115 - AUD185 for most long haul

It does look like QF is reducing 1 fuel fine of USD42 (AUD56) to Fiji down to AUD50 from the 11th Oct

Dave

 

[Mal]

It does look like QF is reducing 1 fuel fine of USD42 (AUD56) to Fiji down to AUD50 from the 11th Oct

Nup. Looks like another increase

"Effective for tickets issued on/ after 11 October 2006, the Qantas Fuel Surcharge for all sectors between Australia and Fiji will increase from USD42 to USD50"

 

[JohnK]

Nup. Looks like another increase

"Effective for tickets issued on/ after 11 October 2006, the Qantas Fuel Surcharge for all sectors between Australia and Fiji will increase from USD42 to USD50"

Well that fuel surcharge reduction only lasted 13 minutes.

Let's hope that any future fuel surcharge reductions last a little longer. Like never to be charged again!

 

[Dave Noble]

Nup. Looks like another increase

"Effective for tickets issued on/ after 11 October 2006, the Qantas Fuel Surcharge for all sectors between Australia and Fiji will increase from USD42 to USD50"

Indeed. I took the fine details from consolidatedtravel.com.au which listed the new fine as AUD50 rather than USD50. How can QF justify increasing the fine as the fuel costs drop

Dave

 

[Kiwi Flyer]

LH has dropped its longhaul fuel surcharge by 10 euros.

 

[StevePER]

The papers are speculating on a fuel surcharge drop next week based on this quote:

Qantas general manager John Borghetti told The Age last night: "We are analysing the situation and expect to make adjustments to our fuel surcharge next week."

Note that he said adjustments and not reductions!