Qantas Airways Cancels Carbon Surcharges on Airfares
10th Jul 2014
Passengers of Qantas Airways will have a reason to smile about the good news that the airline has just announced recently?its decision to cancel any surcharges on its tickets.
The airline originally made a public announcement on the possibility of imposing surcharges on its airfares following the carbon tax law mandated by the government. The government, however, has repealed the particular law today causing Qantas Airways to reconsider its decision to impose surcharges as a result.
Qantas and most other airlines have been hesitant to increase their airfares due to the highly-competitive market.
The flag carrier had announced in 2012 that it will increase its airfares on its domestic network due to the imposition of carbon tax law.
The carbon surcharges are calculated based on the estimated carbon emission by an aircraft, average fuel consumption, and the average number of passengers per flight per sector in each zone covered by the airline.
Qantas estimates that its carbon tax liability would amount to AUD$118 million for the fiscal year, 2013-2014.
According to Cameron McDonald, an analyst from Deutsche Bank, the decrease in domestic travel demand is primarily attributed to the recent airfare increase.
He further said that demand and supply in the country's domestic travel is evidently mismatched with passenger growth not proportional to the average long-term growth over a two-year period since 2012 December.