Business

Xenophon wants ACCC to launch airline fuel price probe

INDEPENDENT Senator Nick Xenophon has called on Australia's competition watchdog to investigate claims airlines are price-gouging travellers through unreasonably high fuel surcharges.

Flight Centre boss Graham Turner told The Australian this week surcharges remained high despite jet fuel prices falling to their lowest level in more than a year.

So concerned by the claims was Senator Xenophon he wrote to the Australian Competition and Consumer Commission on Friday requesting an urgent inquiry.

"Flight Centre has found that, on average, jet fuel prices are three times higher than in 2004, when the surcharges were first introduced," Senator Xenophon said.

Flight Centre cited the example of the surcharge on a Qantas return airfare to London, which started as a $60 surcharge in 2004 to now sit at $760.

The analysis found fuel surcharges varied from airline to airline for the same route, with British Airways charging $763, Malaysia Airlines $590, Virgin Atlantic $580, Singapore Airlines $571 and Cathay Pacific $532.

"If that price accurately reflects what Qantas is paying in fuel for that route, they need to find a better deal," he said.

"When you see figures like this, it's hard to believe airlines aren't using these surcharges as an opportunity to skim a little off the top."

A Qantas spokeswoman told APN Newsdesk the airline's fuel costs were $2.2 billion in the first half of the current financial year - the same as the previous year.

"Our annual fuel bill in 2011/12 reached a record $4.4 billion, making it by far our biggest operational cost," she said.

"We keep fuel costs under constant review and clearly if there is an opportunity to reduce our surcharges we will do so, as we have in the past."

The spokeswoman said fuel surcharges, which only apply to international flights, did not cover the cost of fuel per passenger.

She said half of the cost of operating an international flight was attributable to fuel costs.

Topics:  accc airline business fuel nick xenophon qantas surcharge


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