Qantas flags higher air fares as Ukraine war sends oil soaring

[SYDNEY] Qantas Airways flagged a period of higher air fares to claw back rising fuel costs as Russia's invasion of Ukraine sends oil prices soaring.

"The group is very well placed to be able to recover the cost of fuel if it stays at the levels that it is at the moment," Qantas chief financial officer (CFO) Vanessa Hudson said in an interview with Bloomberg Television on Tuesday (Mar 8).

Oil is at its highest level in a decade after the US said it was considering a ban on Russian petroleum imports. A protracted period of costlier fuel, one of the biggest single costs for any airline, threatens to pile more pressure on an aviation industry still struggling to emerge from the pandemic.

Hudson said demand for air travel at Qantas is strong enough to tolerate ticket-price hikes, a strategy the Australian carrier has typically used to manage higher fuel costs.

"What you need for that is strong underlying demand and relatively stable and rational capacity, and right now we are seeing that," she said. "We're seeing very strong leisure demand coming across both our domestic and our international markets." BLOOMBERG