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Record High Oil Prices Force Increase In Fuel Surcharge

23/08/2004

Virgin Blue Suspends Direct Sydney-Canberra Flights

Virgin Blue has announced it will increase its fuel surcharge fee as a result of record high oil prices. Domestic flight surcharge will go from $6 per sector to $10, while the surcharge on International flights will increase from $10 to $20*.


The low fare airline introduced the surcharge three months ago in line with other airlines around the world, who have now also moved to increase the charge, as the cost of jet fuel soars over $55 per barrel, nearly double what it was two years ago.


The increased surcharge will come into effect after midnight on 26 August so anyone making a booking between now and midnight on August 25 will only be charged the existing surcharge.


Head of Communications and Strategy, David Huttner, said “Like many airlines globally, Virgin Blue’s low fare mantra is being challenged by sky high fuel prices. We regret having to pass the cost on to the travelling public but, as a low fare airline, it is not viable for us to absorb such exorbitant increases in our costs. Virgin Blue is still determined to be the low fare leader wherever we fly in Australia, New Zealand and the South Pacific. It is important to note that despite today’s sky high fuel prices, the cost of flying is still dramatically lower than when we started four years ago. This is true, even taking into account increases in CPI, the 10% impost of GST and the more than doubling of charges at a number of monopoly airports.”


The airline will continue to monitor the situation and will consider reducing or scrapping the fee if fuel prices return to previously budgeted levels.

Separately, Virgin Blue has confirmed it will suspend its Sydney-Canberra service as of Saturday 4 September. The aircraft is being redirected to Tasmania where the demand for Virgin Blue product and service has seen a notable increase.


The decision to halt the Sydney-Canberra flights comes in the wake of unsustainable loads on the route reflecting the slow take up by many government agencies of the 'best fare of the day' policies, despite the substantial savings being achieved by numerous large private sector corporations and the Queensland Government when they implemented the same policies.


David Huttner said, “Our major competitor continues to have a stranglehold on the $300 million spent each year on air travel by Commonwealth officers. Whilst we have recently seen a small increase in Virgin Blue's share of the Commonwealth Government market, it is the case that Qantas continues to have around 95% of that market, a most unhealthy situation and contrary to sound competition policy. With the encouragement of the Department of Finance and Administration as well as the Department of Transport and Regional Services, modest progress is being made in encouraging a handful of key agencies, such as Defence, to finally break the Qantas stranglehold on their accounts. While this shows some promise, more needs to be done if taxpayers are to get a fairer deal. If solid improvement occurs then we will be able to review today’s decision in the not too distant future.”


The airline has noted much stronger support on its Melbourne-Canberra service that now operates up to 4 return flights daily and the recently increased 3 per day Brisbane-Canberra return flights. New services from the nation’s Capital to Adelaide and the Gold Coast are also trending in the right direction due to the greater mix of leisure and private sector traffic that makes the routes viable despite Qantas’s continuing dominance in overpriced taxpayer funded travel.


“We have always made it very clear that, as a low fare airline, we can’t and won’t continue to operate on routes that aren’t strongly trending towards profitability. While we apologise to our numerous cost conscious loyal supporters on the Sydney-Canberra service, we will not sustain a service where the dominant customer isn’t giving all suppliers a fair go,” David Huttner finished.


For Virgin Blue bookings, log onto www.virginblue.com.au, phone our award winning Guest Contact Centre on 13 6789 or Pacific Blue Guest Contact Centre on 13 1645 (Aust) or 0800 670000 (NZ) or call a travel agent.

*Surcharges to be the equivalent to AUD increases in local Fiji/New Zealand Dollars for bookings originating in Fiji/New Zealand respectively. Fijian price increases are subject to government approval.

** All guests booked on Sydney-Canberra flights after the 4th of September will be offered the choice of alternative flights on Rex or a full refund.