Qantas CEO Joyce cites fuel prices as 'biggest threat'

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The spiralling cost of fuel is the biggest threat to Qantas since the global financial crisis, according to the Australian carrier's CEO, Alan Joyce.

He made the comment as the Australian airline announced a rise in its fuel surcharges on international tickets and introduction of a surcharge to domestic and Tasman Qantas Frequent Flyer Classic Award redemption seats from 28 April.

Domestic, regional and trans-Tasman ticket prices will also rise by 5%.

A Qantas spokeswoman says the new surcharges are purely for Australia-originating flights - A$100 ($105) for services to the UK, Europe, mainland US and Canada and A$50 to South America, South Africa and India. The airline has already increased domestic fares and international fuel surcharges twice this year in response to the rising cost of fuel.

Joyce, talking to the Australian Institute of Company Directors, said that the rises in surcharges and ticket prices were "unfortunate, but essential to protect our business.

"Jet fuel prices have increased by more than 40% since November 2010. This year the Qantas Group will spend approximately A$3.7 billion on fuel. And the truth is, after fuel hedging, fuel surcharges ans fare increases, Qantas will still not fully recover these higher fuel costs."

He said some trade union leaders had accused the airline of crying wolf over the cost of fuel. "The truth is the wolf is not just inside the door, it's gnawing at our leg."

Joyce also attacked what he described as "a sustained assault by certain elements of the trade union movement", with several unions putting forward "completely unacceptable demands". Such demands, he said, were "nothing short of a kamikaze campaign. The unions representing pilots and licensed engineers are demanding commitments that would kill the jobs of their members.

"They are demanding a guarantee of job security, and in effect, a veto on change. I understand that people want job security, but it is no more in my power to guarantee jobs in writing than to promise that Santa will swing by on 24 December."