Carbon Tax Hits Qantas, Virgin Australia

By Bizclik Editor

 

Prime Minister Julia Gillard’s proposed $23 carbon tax will no doubt trickle down to Australian consumers, top airlines Qantas and Virgin Australia are saying.

Both airlines have forewarned that the tax they’ll be forced to pay on domestic fuel will be passed on to consumers, as they cannot absorb the millions of dollars the carbon tax will cost. Qantas estimates the estimated cost impact will be approximately $110-115 million in the financial year ending June 2013 alone. Government officials have also estimated that the tax on aviation kerosene used in jets will rise annually from the current 3.556 cents a litre to 10.16 cents a litre by 2014-15.

 

SEE RELATED STORIES IN THE WDM CONTENT NETWORK

Ten Best Restaurants in Australia 

Business Travel: Executive Guide to Hong Kong 

Business Celebrity Adam Scott

Read the latest Business Review Australia! 

 

“Based on the estimated additional costs, the Qantas Group expects that the price of a single domestic flight sector will increase on average by approximately $3.50 in FY13. Fare increases will vary depending on sector length and will be communicated transparently to consumers,” Qantas said.

Following the transition to an emissions trading scheme in July 2015, aviation fuel excise increases will be determined based on a six-month average of the market price for carbon, Qantas said. That means more unknowns are on the horizon, when the aviation excise will be increased on a six-monthly basis, based on an average carbon price for the previous six months.

Qantas was one of the worst performers on the ASX Monday as shares plummeted down 6.5c at $1.935. Virgin Australia's assertion that the carbon tax would cost it $45 million in the tax's first year saw its shares fall 1c to 34c.

Share

Featured Articles

Welcome to the New Age of the CISO

HE Dr Mohamed Al-Kuwaiti, Head of Cyber Security, UAE Government and Dr Aloysius Cheang, Chief Security Officer Huawei UAE, on the new age of the CISO

Making the UAE the world’s strongest digital fortress

His Excellency Dr Mohamed Al-Kuwaiti, Head of Cyber Security, UAE Government, on visionary plans to build the world’s most secure digital society

World Mental Health Day – 10 apps to improve wellbeing

Employers should recognise the growing use of apps to help support mental health – here are 10 to consider on World Mental Health Day

Exec interview: Brook Sims, COO, MAC Diversity Recruiters

Leadership & Strategy

Best new books that will make you a better leader

Leadership & Strategy

5 Mins With: Jeff Li, founder and CEO of Shoplazza

Leadership & Strategy