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Qantas rules out fare changes despite fuel price fall

Overall Qantas fares will not change despite a fall in the price of jet fuel.

The Australian carrier is to abolish fuel surcharges on international ticket prices.

But fares will remain the same because the surcharge will be absorbed into base fares.

Qantas said it will continue to price competitively, with fares moving in line with the broader market.

“While global fuel prices have fallen in recent months, international air fares are extremely competitive and are significantly lower than when surcharges were first introduced 10 years ago,” the airline said.

Qantas Group chief executive Alan Joyce said: “If you look at the trends in global aviation over the past decade, costs and competition have been increasing while fares and airline margins have been falling.

“The dynamics of this market have seen Qantas International post significant losses in the past two years. Even now, yields remain significantly below pre-global financial crisis levels and like the rest of the industry our strategy is to keep strengthening them.

“Factoring in lower fuel prices, Iata estimates that the net profit airlines make per passenger this year will rise by just $1 compared with last year, from $6 to $7.

“In a highly competitive environment where customers are already paying less than they were several years ago, lower oil prices can help put the industry on a more sustainable footing.

“It means airlines are in a better position to invest in the new aircraft, new lounges and new routes that ultimately benefit customers,” he said.

Given the size of the Qantas International network the process to absorb fuel surcharges into international base fares for up to 200 destinations will take time,” the airline said.

“As overall fares are not changing, customers will not be disadvantaged.”

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