27th January 2015: In an announcement in Sydney this morning, the Qantas Group has released details of reduced charges for Frequent Flyer redemption bookings by up to $130 and the gradual restructure its international tariffs so that fuel surcharges are absorbed into base fares. This means that fares are unlikely to change very much as the advertised fares already have taxes and other charges built in. The airline spokesman said that Qantas fares will remain competitive in line with prices in the market and are significantly lower than when surcharges were first introduced 10 years ago.
Although absorbing fuel costs into the base fare without changing the fare structure overall will take some time, customers can still look forward to better prices during sales, such as the drop of AUD300 or more in economy fares to Asia, the US and Europe in the past week.
However, if you are a Qantas customer looking to make redemption bookings, fuel-related charges that currently apply to Frequent Flyer on Qantas and Jetstar Classic Award will fall by up to $110 in Economy and up to $130 in Premium Economy on some routes for a return flight starting 28th January. Reductions will vary across the network but average around 14 per cent.
As there has been no change to the way you may redeem or earn rates, the cut will deliver a tangible benefit to Frequent Flyers.
During a Press Conference at which these initiatives were announced, Qantas Group CEO, 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-GFC 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.”
He further added “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.”
Image Source: Qantas