Qantas issues airfare warning

Qantas has warned its customers it may increase the price of its airfares. Picture: NCA NewsWire / Andrew Henshaw

A rise in airfares is on the cards for Qantas customers if the cost of jet fuel remains high, the airline has cautioned.

The warning comes in the airline’s September market update and just three days after new Qantas boss Vanessa Hudson issued an apology to customers, promising to make changes to win back customers’ trust and rebuild the company’s flagging reputation.

However, in good news for frequent flyers, the national carrier said more discounted seats would be available for purchase with points.

The expected increase in airfare prices is due to a jump in the cost of jet fuel, which has risen 10 per cent since the beginning of August.

The fuel hike is expected to cost the airline $2.8bn, up $200m, for the six months to December 31.

“This is driven by a combination of higher oil prices, higher refiner margins and a lower Australian dollar,” the market update to the ASX read.

Freshly minted Qantas chief executive Vanessa Hudson apologised to customers just three days ago and promised to rebuild the community’s trust. Picture: NCA NewsWire / Christian Gilles

Qantas said while it would “continue to absorb these higher costs”, it would maintain its fuel price monitoring in the months ahead and alter fares if required.

“Any changes would look to balance the recovery of higher costs with the importance of affordable travel in an environment where fares are already elevated,” it said.

Qantas also flagged an $80m investment to improve customer service in the next financial year.

The airline has been confronted with a series of controversies that led chief executive designate Vanessa Hudson to take the reins earlier than anticipated after Qantas boss Alan Joyce resigned two months before planned.

Public furore came to a head last month when the airline revealed a super-sized $2.47bn profit result while it slashed costs and struggled to offer adequate customer service.

An jump in the price of jet fuel could force customers to pick up the bill, the airline has warned. Picture: NCA NewsWire / Andrew Henshaw

A class-action lawsuit over pandemic-era refunds, an ACCC investigation over selling cancelled fares, the refusal to pay $2.5bn in government subsidies, and a poor showing by then chief executive Alan Joyce at a senate hearing added to the airline’s woes.

A separate High Court ruling last week upheld a Federal Court ruling that the airline illegally sacked 1700 workers during the Covid-19 pandemic. The retrenched staff are expected to receive hundreds of millions of dollars in compensation.

Late last week it was revealed that Mr Joyce was paid $21.4m in the 2022-23 financial year; however, more than half of that could be withdrawn due to the pending ACCC investigation.

The airline also became a target after the federal government denied Qatar Airways’ application to increase its capacity into eastern Australia, thereby reducing competition in the aviation industry.