In response to Virgin Australia's announcement to increase base fares and fuel surcharges on flights sold from August 22 2013, Flight Centre Limited's Managing Director Graham Turner said that while international airfares are affordable at the moment, he urges customers to finalise their flight arrangements prior to the price increase taking effect.
"Why pay extra if you can avoid it? For families in particular, the savings opportunity is significant. For a family of four travelling overseas, the fuel surcharges could mean an added $200 to your bill if you book after the increases come into effect," said Mr Turner.
"If you plan to travel overseas with Virgin in the short to medium term, our advice is to consider paying in full within the next two weeks to ensure the ticket is issued in advance of the changes."
Virgin Australia cited higher fuel costs and the sustained fall in the value of the Australian Dollar as reasons for the increase.
The Virgin Australia Chief Commercial Officer is Judith Crompton.
"As a result of the competitive environment, Virgin Australia has been unable to recover previous increases in fuel costs and is now facing higher fuel costs primarily due to the fall in the value of the Australian dollar. In making these changes, we have been very conscious of balancing our commitment to providing competitive fares with the operational costs of our business," said Ms Crompton.
"We will continue to closely monitor fuel prices and consider increases or decreases to our fuel surcharges and fares in line with changes in market conditions."
The Virgin Australia price increases are as follows:
- $25 increase each way to United States, Europe and the Middle East for the Economy cabin, through a change in base fares.
- $35 increase each way to United States, Europe and the Middle East for the Premium Economy cabin, through a change in base fares.
- $50 increase each way to United States for the Business cabin, through a change in the fuel surcharge and base fare.
- $65 increase each way to Europe and the Middle East for the Business cabin, through a change in base fares.
- 3% increase in base fares on the majority of short-haul international routes.
- 3% average increase in domestic and regional base fares.
Virgin's announcement comes on the back of Qantas also citing rising fuel costs and the falling Australian dollar as their justification for increasing fuel surcharges or the base fare on its international routes, and raising fares on its domestic network by an average of two to three per cent.
In announcing the price increase, which takes effect from today, Qantas said in a statement that, "The increases to fuel surcharges vary by route and cabin. Customers travelling in Economy on the routes on which the changes have been applied will see an average increase of around $20 one way."
"There are a number of international routes – namely to Hong Kong, the United States and South Africa - where regulatory and market conditions make it more appropriate to incorporate the increase into the base fare, rather than the fuel surcharge, as means to recover fuel costs. For example, Economy customers travelling to the United States will see an increase in the base fare of $25 one way."
The airline does note that this is the first increase in fuel surcharges across their international network since April 2012.
"Since that time, the real cost of Singapore Jet Fuel in Australian dollars has increased significantly. While we use a range of tools to mitigate the impact of fuel costs – including fuel surcharges, price increases and hedging – the Qantas Group is still under-recovering the cost of past fuel price increases. We regularly review our fuel surcharges policy and will consider further changes to the fuel surcharge policy as appropriate."
To avoid the surcharges, all Virgin international travellers have until August 21 to get their flights ticketed.