Qantas raises fares as fuel costs bite

Your next business trip is about to get that bit more expensive.

Qantas chief executive Geoff Dixon has announced that the airline will increase fares on its Qantas and QantasLink flights. Prices on domestic routes will rise by 3.5% and international flights will jump by 3% from 9 May, as rising fuel costs bite into the company’s earnings.

Dixon says that while the company has tried to cut costs through a hiring freeze and other methods, the company has to raise prices to meet its guidance of a 40% increase in profit before tax for 2007-08. “An increase in base fares is now necessary to partially bridge the widening gap between the actual increase in the cost of fuel and the amount we offset through surcharges or non-fuel cost improvements,” Dixon said in a statement to the ASX. “We will continue to monitor fare and surcharge levels and review our network and schedule to optimise capacity.”

Qantas is reviewing fares for its Jetstar discount airline.