Qantas says airfares could rise due to high oil prices

Qantas has hedged 90 per cent of its fuel needs through the end of June and 50 per cent in the following quarter, Chief Executive Alan Joyce said

PRAVASISAMWAD.COM

The next time you take a flight out of Australia for India, it could cost you a lot more than what it is today. Qantas Airways, the national airline of Australia, expects airfares will have to rise to cover the cost of higher fuel prices as its oil hedging contracts expire. Qantas has hedged 90 per cent of its fuel needs through the end of June and 50 per cent in the following quarter, Chief Executive Alan Joyce said.

“Hedging gives us time to react to that higher fuel price,” he said at a conference hosted by The Australian Financial Review. “If we stay at these levels, airfares are going to have to go up.”

“Demand for international flights was strong in key destinations, with demand for tickets between Australia and London and Australia and Los Angeles higher than before the pandemic.”

— Alan Joyce, Chief Executive Qantas

Joyce said based on current oil prices, Qantas would need to raise revenue per available seat kilometre – an industry measure mixing fares and the percentage of seats filled – by 7%. “Seven percent is not massive but it will have an impact on some levels of travel out there,” he said.

Joyce said domestic leisure travel demand had recovered to pre-pandemic levels, but business travel demand was lagging.

Demand for international flights was strong in key destinations, with demand for tickets between Australia and London and Australia and Los Angeles higher than before the pandemic, he said.

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