The prospect of job losses, capacity cuts and higher ticket prices have been raised by Qantas as it responds to soaring fuel prices and global uncertainty.
The carrier is raising domestic, regional and trans-Tasman air fares sold in Australia.
Increases of up to A$10 per sector will apply to domestic and regional fares for tickets issued on or after tomorrow (March 31). Increases of up to 8% will apply to Tasman fares.
The carrier hiked fares and other charges earlier this year due to rising fuel costs but said it would not be able to recover the full impact of current and forecast fuel prices.
Chief executive Alan Joyce said there had “never been a time when the world faced so many natural disasters”, with earthquakes in Japan and New Zealand and Australia devastated by floods and cyclones.
Domestic and international capacity is being cut with flights to Japan either suspended or reduced while services to earthquake-hit Christchurch also trimmed.
Management positions would be reduced and two ageing Boeing 767s retired early, the airline said. Joyce warned that the current situation presented a significant threat to airlines in Australia and around the world.
“The increasing price of fuel is a major concern for the Qantas Group and the global aviation industry,” he said.
“Airlines have a range of options available to them to manage this significant cost, and Qantas is among the best in terms of using mechanisms such as hedging and fuel conservation.
“However, the situation today is very different to the last fuel crisis, when the global economy was strong. This time, the world is still emerging from the global economic crisis, and demand is still recovering.
“Since international fuel surcharges and domestic fares increased last month, jet fuel prices have increased by a further 15%, to more than US$134 per barrel today.
“Even with favourable hedging in place, it is still at a much higher price than we can absorb. In spite of this hedging offset, fuel surcharges and fare increases, we will not be recovering the full impact of current and forecast fuel prices.
“Our ongoing response to this situation remains under review and we also cannot rule out further increases in surcharges and fares in the future,” he added.
Fuel costs for the Qantas Group in the second half of this financial year are expected to rise to A$2 billion.