re: houston - oil rises to us$67.94 hahahahah u guys are so...

re: houston - oil rises to us$67.94 hahahahah u guys are so fixed on oil, but QAN will just make their customers pay for it, and so they should

Go look at UK:BAY at www.bigcharts.com it doesn't seem to be effecting british airways is it. QAN's movement is not due to OIL

Flying foreign and paying Qantas for the fuel
Terry McCrann
03mar06

QANTAS is slugging passengers with a $75 fuel surcharge on legs of flights where it hasn't actually incurred any fuel cost – because it's not even flying them on that leg.

That's to say, it – generally – slaps on the $75 even on those international legs which are actually flown by one of its code-share partners.

So how do you justify a `fuel surcharge' when you ain't, well, actually using any fuel?

Is it a rort? Maybe, maybe not. On the John Singleton definition, definitely. A rort's only a rort when you're not in on it – and passengers certainly ain't.

You decide. But in any event, being aware of it might save you money next time you book an international flight.

Qantas charges a $75 fuel surcharge for each long-haul – international – sector sold by it. So if you were flying to Europe with one stop each way, you'd pay $300. That's a pretty hefty component of an economy ticket.

Now the $75 goes on irrespective of whether Qantas actually flies the leg. So if you flew that second leg, say Singapore, you'd still pay. And Qantas keeps the money – it does not pass it over to Singapore.

The airline has essentially two defences – it would probably prefer to call them explanations. Everyone does it; and the total amount collected by the surcharges still falls short of its increased fuel cost.

The `everyone does it' is actually more substantive than the way I've, a little naughtily, posed it.

What Qantas means is that it's the industry practice for airlines to retain fuel surcharges under code-share agreements.

Code-share means where you get single ticketing from Qantas even though some of your legs are going to be flown on other airlines. So you get a seamless process.

So if Qantas charges its $75 on the leg flown, say, across the US by American; it keeps the $75. And in the reverse, were American to charge someone it has ticketed a fuel surcharge on the leg flown across the Pacific by Qantas, it would keep that.

So it's a matter of swings and roundabouts. Qantas is getting the fuel surcharge for legs it hasn't flown passengers; and not getting the surcharge where it is flying passengers ticketed by other airlines.

Swings and roundabouts only up to a point though.

And it's a point, which is mired in airline accounting – which makes Hollywood accounting look a model of honesty and transparency – and competitive realities.

Yes, Qantas won't get the `fuel surcharge' that American might or might not have charged on its ticketing for the trans-Pacific leg. But the price at which Qantas has sold the seat on its plane on that leg to American might already include the fuel surcharge.

It's all a matter of `what the market can bear'. And as we know, as Qantas has a near-monopoly on the trans-Pacific route, that particular market can bear a lot.

In very sharp contrast, the much more competitive market across the US can't `bear' a lot. So it is interesting that Qantas has dropped the fuel surcharge on those legs.

The airline's head of finance, strategy and yield, Gareth (singular) Evans, said yesterday: There could be "competitive" reasons why Qantas didn't add the surcharge on certain code-share services operated by other carriers.

For example, "for competitive reasons", last November we removed the surcharge on Qantas marketed code-share services operated by American, America West and Alaskan, he added.

That's another way of saying that Qantas's $75 fuel surcharge made its ticket flying, say, American across the US, $75 more expensive than flying exactly the same American flight but with an American ticket.

And this is the key point for you. When buying international, don't just accept the seamless Qantas ticket (or indeed that of any airline).

You might be paying surcharges you don't have to, if you get one or more legs ticketed directly with the actual carrier, not the marketing airline.

Ultimately though, it is all about the bottom line. You might find that a Qantas ticket, even with the surcharges, could be cheaper. The kangaroo might be offering a cheaper base price.

But at $75 a leg, it can add up. A case in particular point is that this added 10 per cent to the cost of a return flight to the US.

So in the final analysis is it a rort? Even if all airlines are in on it.

Qantas charges $75 an international leg, irrespective of distance and so fuel actually used. It wants to spread the cost across all passengers.

So in that sense, charging the $75 even when it's not using any fuel; is just an extension of the `spreading the cost'. With even that, not adding to enough for the total fuel surcharge to fully cover the extra cost of gas.

But call me old-fashioned. I just can't cop a `fuel surcharge' when you are not actually using any fuel.

Plus, it's only sustainable in an uncompetitive market – did anyone mention the Pacific? And/or when the consumer is uninformed.

`Everyone does it'. It's a rort.