Qantas and Virgin Australia say they cannot absorb the higher cost of fuel when the country’s carbon chargig scheme kicks in July 2012. Qantas said today that the average domestic fare would go up by $3.50 per flight – or $7 a return ticket. Virgin said it expected the increase to be about $3 per ticket, depending on the length of the flight. Qantas said it expected the carbon plan to cost the airline group between $110 million and $115 million in 2012/13. Virgin stock tumbled 2.86%, or one cent, to 34 cents after the carrier said the carbon plan would result in a $45 million hit in 2012/13, based on current domestic fuel consumption. The airline said it was too early to forecast the impact of the carbon plan on passenger demand.
The Australian federal government has proposed charging Australia’s 500 biggest companies $23 per tonne of carbon emitted, from July next year.