Qantas says it will increase domestic and regional airfares by up to AU$10 a sector to offset the increased cost of fuel.
The fare increases will take effect for tickets issued on or after March 31, and price rises of up to 8 percent will also apply to trans-Tasman routes.
Qantas chief executive Alan Joyce says jet fuel prices have increased a further 15 percent to more than US$134 a barrel since the airline increased international fuel surcharges and domestic fares last month.
He says the airline is not in a financial position to absorb all of the extra costs.
"Even with favourable hedging in place, it [jet fuel] is still at a much higher price than we can absorb. In spite of this hedging offset, fuel surcharges and fare increases, we will not be recovering the full impact of current and forecast fuel prices," Mr Joyce noted in a statement.
"Our ongoing response to this situation remains under review and we also cannot rule out further increases in surcharges and fares in the future."
The airline says Brent and Singapore jet fuel prices are at the highest level in around three years, and prices in the second half of the financial year are expected to be 20 percent higher than in the first half.
Mr Joyce says the rising fuel prices are also occurring at a much more dangerous time for the global aviation industry.
"The situation today is very different to the last fuel crisis, when the global economy was strong," he added.
"This time, the world is still emerging from the global economic crisis, and demand is still recovering."
Yesterday, rival airline Virgin Blue warned investors that it is heading for a AU$30-80 million annual loss this financial year, due to the impact of rising fuel prices and natural disasters.
Qantas's statement gave no update on its profit outlook.
The fare increases will take effect for tickets issued on or after March 31, and price rises of up to 8 percent will also apply to trans-Tasman routes.
Qantas chief executive Alan Joyce says jet fuel prices have increased a further 15 percent to more than US$134 a barrel since the airline increased international fuel surcharges and domestic fares last month.
He says the airline is not in a financial position to absorb all of the extra costs.
"Even with favourable hedging in place, it [jet fuel] is still at a much higher price than we can absorb. In spite of this hedging offset, fuel surcharges and fare increases, we will not be recovering the full impact of current and forecast fuel prices," Mr Joyce noted in a statement.
"Our ongoing response to this situation remains under review and we also cannot rule out further increases in surcharges and fares in the future."
The airline says Brent and Singapore jet fuel prices are at the highest level in around three years, and prices in the second half of the financial year are expected to be 20 percent higher than in the first half.
Mr Joyce says the rising fuel prices are also occurring at a much more dangerous time for the global aviation industry.
"The situation today is very different to the last fuel crisis, when the global economy was strong," he added.
"This time, the world is still emerging from the global economic crisis, and demand is still recovering."
Yesterday, rival airline Virgin Blue warned investors that it is heading for a AU$30-80 million annual loss this financial year, due to the impact of rising fuel prices and natural disasters.
Qantas's statement gave no update on its profit outlook.
