Qantas Reviewing Fuel Surcharge on Air Fares

Qantas (ASX:QAN) is reviewing its fuel surcharge on air fares as oil prices hit news records amid growing concerns about military conflict between the US and Iran.

The national carrier has revealed is considering what would be its sixth hike in the levy since March 2004, after US oil prices romped to all-time highs above $US71 ($A95.77) a barrel on Tuesday night.

"We are currently reviewing our fuel surcharges due to sustained high fuel prices," Qantas chief financial officer Peter Gregg said.

Domestic rival Virgin Blue (ASX:VBA) is also keeping a close eye on the oil price situation.

"No decision has been made regarding any increase to the existing fuel surcharge and while there is no time frame on the decision, the price of oil is being carefully and constantly monitored," a Virgin Blue spokesperson said.

Qantas last raised its fuel surcharge in September 2005, when it hiked the fee from $A20 ($US14.83) to $A26 ($US19.28) for one-way domestic flight to help offset an estimated $A1.25 billion ($US926.69 million) increase in its annual fuel bill.

Virgin Blue nearly doubled its fuel surcharge from $A10 ($US7.41) to $A19 ($US14.09) per sector in April 2005.

In the UK, British Airways has already announced that it will increase its fuel surcharge on long haul flights from Friday following further rises in the price of fuel.

The airline has raised its long-haul fuel surcharge on tickets sold in the UK from STG30 ($A72.25) to STG35 ($A84.29) for a one-way flight in it what is its sixth hike since March, and is reviewing similar increases for tickets sold in overseas markets.

It estimates that its fuel bill will total STG1.6 billion ($A3.85 billion) in 2005/06.

Qantas shares were three cents higher to $A3.42 ($US2.54) at 1335 AEST, while Virgin Blue was down three cents to $A1.85 ($US1.37).

(AAP)

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