SYDNEY (dpa) – Australia’s ailing Qantas airline Tuesday said it would lower the fuel surcharge on frequent flyer bookings and gradually hike base fares to compensate.
The Sydney-based company said passengers signed up to the programme would save an average of 14 per cent across the Qantas network.
Overall fares would not change as a consequence of the lowered surcharge as of Wednesday, the company said.
The move came days after rival Virgin Australia announced it would cut its fuel surcharge on US-bound flights, reducing economy ticket prices by around 40 Australian dollars ($32).
Qantas chief executive Alan Joyce said the decrease in oil prices would benefit the airline that posted a record loss of 2.8 billion Australian dollars in 2013-14.
“We are seeing significant benefit coming through on fuel and that will help our international business get back into profits and it will help Qantas invest in the customer,” Joyce said.
Australia’s consumer watchdog is investigating whether either Qantas or Virgin deceived passengers by keeping the surcharge after oil prices began falling.