Back in Oct 2004 - Interesting article on QF Fuel surcharges.

[AlphaVictor]

I was pondering the other day if all the fuel surcharges were removed domestically what airfares would fall to, or would they fall at all? So trying to find exact amounts of QF fuel surcharges wasn't that easy as they are hidden in with insurance in the YQ box (there's a whole court case about this - but that's another post)

The funny thing is that you can access travel agents section of Qantas with no password to view all the details of the number and costs of fuel surcharges.

Qantas Industry Sales Site - Policies and Procedures - Qantas Fuel Surcharge

It states that the current common domestic fuel surcharge is USD$23 per sector, which hasn't changed since 2007 when it was USD$26 per sector.
If I had a day or two I'd go through them all.

That got me thinking - lets go back to the beginning or as close as I can to the beginning. Hence the SMH article from 2004.

Qantas raises fuel surcharge - Business - www.smh.com.au

I'm no expert, but when oil was at USD$55 in 2004 (and the AUD was at .72) and Qantas had "some" hedging. Surcharges were as follows

Domestic AUD$12 per sector (USD$8.60)
International AUD$29 per sector (USD$20.88)

(I know oil hasn't been that long at USD$55 in 2008, but continue reading)

Now compare this with the current fuel surcharges (Nov 14 2008) from the Qantas Travel Agents section. (Bearing in mind that this YQ surcharge does have a $2 - $3 USD insurance component)

Domestic USD$23 per sector (AUD$35.93)
To London / Frankfurt USD$180 per direction (AUD$281)
USA / Canada USD$150 per direction (AUD$234) -

ETC

When the journey is between AUS and India
- For travel between gateway cities in Australia and
BOM/DEL – online Qantas – for international sectors
- USD 150.00 per direction
USD 150.00 on all sectors between Australia and JNB
USD 100.00 on all sectors between SIN and India
USD 106.70 on all sectors into/out of HKG
USD 70.00 on all sectors between Australia and NZ
USD 115.00 on all other sectors

I may not have all the facts, but I do find it interesting and concerning at the same time. Read into it however you like. If there is something I've missed please fill me in

Thanks!

[drron]

Just like mortgage interest rates-quick to go up,slow to come down.
some economic forecasters are now predicting oil will fall below $40 a barrel-that will make justification of continuing surcharges interesting.My guess is the surcharge will go but fares go up approx the same amount.

[dajop]

Originally Posted by drron

.My guess is the surcharge will go but fares go up approx the same amount.

Which would be fine, and i admire your optimism.

My guess (much more cynical) would be that base fares will fall, but surcharges will fall very slowly, just because of the revenue they bring in from award and RTW bookings.

[NM]

Originally Posted by drron

Just like mortgage interest rates-quick to go up,slow to come down.
some economic forecasters are now predicting oil will fall below $40 a barrel-that will make justification of continuing surcharges interesting.My guess is the surcharge will go but fares go up approx the same amount.

I have no problem with that happening. It would be interesting to compare some fares now to what they were in 2004. I suspect the base fare component is lower (in real terms) and the fuel surcharge is higher. So just remove the farce called a fuel surcharge and include it in the fare just like almost every other business does.

[oz_mark]

While Crude Oil and Jet Fuel prices are highy correlated, the gap between the price of the two has spread over the last few years, and while crude prices are back down to the ~2004 , the same is not true of Jet Fuel, which still needs to come down a bit more.

IATA publish some interesting graphs (Price Development).

Having said that, there really is not much excuse for the slowness in reducing fuel surcharges, and indeed the current situation is a farce.

[BAM1748]

Don't forget, crude prices that effect us are generally the Singapore price, but often you here the price of West Texas quoted on news broadcasts.

Other but less quoted is Brent. (there are many as I think back to by days at Exxon)

So you sometimes see other locations which are selling for less, but the Singapore price is usually more expensive.