By James Wilkinson

In a much needed boost for tourism, Australia’s two major carriers – Qantas and Virgin Blue – have eliminated domestic fuel surcharges following a further and consistent decline in global oil prices.

Virgin Blue has reduced fuel surcharges

Virgin Blue’s announcement on December 23, 2008 was followed by Qantas Group seven days later, which announced that all Qantas, QantasLink and Jetstar domestic flights would be free of all fuel surcharges from January 1, 2009.

Virgin Blue, however, went one step better than Qantas, by reducing the fuel surcharge on one-way international flights – operated by Pacific Blue and Polynesian Blue – to $25 (down from $35).

“Just last month we cut our fuel surcharges by 20 per-cent to $19 for a one-way domestic flight and $35 for Pacific Blue and Polynesian Blue one-way international flights… now we are removing them altogether on Australian domestic routes and cutting them again on our international sectors as a reaffirmation of our commitment to ‘keeping the air fair,’” said Virgin Blue CEO Brett Godfrey.

“We are reluctant to increase the cost of air travel but those record high jet fuel prices this year forced us – along with airlines around the world – to introduce a levy to cover those costs.

“We base our decisions on fuel surcharges on a floating average – not the spot price – and now that we have seen a consistent reduction in that it is only fair and right to pass those savings onto our guests,” Godfrey said.

While Qantas has kept international charges unchanged for now, the airline’s executive general manager, John Borghetti, said they will remain “under review”.

“Fuel remains a major cost to our business and, even with surcharges, we have absorbed significant amounts of the additional record fuel costs incurred in recent years,” Borghetti said.