Qantas to increase fares due to rising fuel costs

Discussion in 'Qantas Airways | Frequent Flyer' started by anat0l, Feb 10, 2011.  |  Print Topic

  1. anat0l
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    anat0l Silver Member

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  2. daedalus
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    daedalus Silver Member

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    While increases in fares are never welcome, fuel prices are on the way up. Fortunately, for domestic fares, they don't play the fuel surcharge game, and place the charge where it belongs, in the fare.
     
    cockpitvisit likes this.
  3. straitman
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    straitman Silver Member

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  4. Dogzrule
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    Dogzrule Silver Member

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    Well, QANTAS do need to keept profit margins high for the shareholders [​IMG]
     
  5. straitman
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    straitman Silver Member

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    As do all companies! [​IMG]
     
  6. JDiver
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    JDiver Silver Member

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    With fuel prices heading skyward faster than an empty Convair 990, I think we can predict price increases for every airline, and threads reporting them in every airline forum here.
     
  7. trippin_the_rift
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    trippin_the_rift Silver Member

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    Why do they even announce price increases? It can't ever be positive...
     
  8. Globaliser
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    I can think of at least two possible reasons:
    1. An announcement explains the rationale. If the fares were just raised without explanation, some people might wrongly think it mere profiteering.
    2. In the current fuel price climate, it's share price-sensitive information, so it ought to be properly released to the market - hence the ASX version.
     
  9. trippin_the_rift
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    trippin_the_rift Silver Member

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    To be perfectly honest, I wouldn't even know if airfares were increased. Everytime I fly the same route it seems to be a different price for the same class. Add to that the number of 'sales' each month and the actual price is quite diluted and confusing, even more so for the average once a year joe-traveller.

    Not entirely convinced on it being a major contributor to stock price... because if it was, then they could work out that market cap increases/decreases by X on each announcement. Also if there was a trend here and logic ran true, then removing all fuel surcharges should increase/decrease by a large portion. I'm sure it's something related to their listing or they wouldn't announce it, right?
     
  10. Globaliser
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    Announcements are not only aimed at the once-a-year traveller.

    I'm not a frequent flyer between SYD, CBR and MEL. I'm only out in Australia two or three times a year. But even I recognise the number given for SYD-MEL, and I've adjusted my mental model accordingly even though I only infrequently pay the year-round fare because my (advance purchase leisure) travel usually allows me to take advantage of one of the sales. But even there, I know what's a deeply discounted sale fare and what isn't.

    And this is before you allow for the people who are flying every week; or the travel agents who advise the public; and so on.

    So just because the announcement isn't useful for you, it doesn't mean that it's not useful.
    I don't follow QF's stock market announcements closely, and haven't had a dig back into them.

    But I know that every BA fuel surcharge change is announced to the stock market, precisely because it is price sensitive information.

    So it's entirely unsurprising that QF should have announced these fuel-related fare increases to the stock market, just as it annnounced its own fuel surcharge increases last week. Why would they do both of those announcements using stock market mechanisms, if it wasn't price sensitive information that has to be released to the market in the orderly fashion required by the market?

    If you are a financial markets expert and know that I am talking rubbish, I would be grateful to be corrected.

    And yes you are right: If QF removed all its fuel surcharges and didn't adjust fares to suit, you would expect to see a massive drop in its share price. Airline share prices usually react to movements in the fuel price, only in the opposite direction.
     

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