News

ACCC looking at fuel surcharges by airlines

Australian Competition and Consumer Commission Rod Sims said the regulator was trying to determine whether the airlines had engaged in deceptive and misleading conduct relating to the fuel surcharges. He said the results of an investigation won’t be known for a few months.

Worldwide airline profit margins are poised to expand significantly this year as a result of the falling fuel price, according to a new Moody’s report.

Qantas is expected to report a $715 million pre-tax profit this financial year but Virgin would report a $9 million pre-tax loss, largely due to ongoing losses from budget subsidiary Tigerair Australia.

The Australian Competition and Consumer Commission has agreed to investigate high fuel surcharges imposed on international flights, following mounting pressure and complaints from consumer groups. Senator Nick Xenophon said the ACCC agreed to his request to investigate Qantas for maintaining its high fuel surcharges despite falling oil prices, which has now more than halved in the past six months.

Moody’s said operating profit margins for the global airline industry were poised to expand to 12 to 14 per cent this year from an estimated 8.5 to 9.5 per cent last year, in part because the fall in the oil price could bring $US35 billion of benefits to global carriers after the effects of hedging and the weakening of currencies against the US dollar.

Qantas and Virgin both impose hefty fuel surcharges on international flights and neither has yet reduced them despite the fall in the oil price. According to the report, Qantas has increased surcharges 13 times and lowered it once in 2009.

While oil prices have plunged almost 60 per cent since June, the fuel surcharges Qantas, Emirates and Virgin apply to international tickets have not shifted.

Related Articles

0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments
Back to top button
WP Tumblr Auto Publish Powered By : XYZScripts.com
AccomNews
0
Would love your thoughts, please comment.x
()
x