Frequent flyers hit as airline surcharges fly high despite slump in fuel prices Qantas and Emirates have kept their fuel surcharges on international flights intact, despite a 25 per cent fall in jet fuel prices since the start of the year. Passengers will be wishing Australia had taken a leaf out of Hong Kong's book before the Christmas holidays, the busiest flying time of the year. Since January, the Chinese territory's aviation regulators have forced Qantas and other airlines to drop passenger fuel surcharges on long-haul flights by almost a third to $HK628 ($95). 'I can guarantee you that it is designed by accountants who have no moral fortitude': Flight Centre managing director Graham Turner. But in Australia, Qantas and Emirates have kept their fuel surcharges on international flights intact, despite a 25 per cent fall in jet fuel prices since the start of the year. Australia's largest travel agent, Flight Centre, has renewed its calls for the airlines to remove the surcharges, which hit travellers redeeming frequent-flyer points hardest. "I can guarantee you that it is designed by accountants who have no moral fortitude," Flight Centre managing director Graham Turner said. Effectively, it is ripping off frequent flyers and not paying their distribution [agents] what they should be. Why the [Australian Competition and Consumer Commission] doesn't do something about it is beyond me. Unlike Hong Kong, there is no regulatory mechanism in Australia to make airlines align their surcharges with the cost of fuel. The decision on what they charge rests with the airlines. Consumer group Choice also said airlines had been "flying high" on fuel surcharges and credit card fees for too long, and needed to pass on to consumers the substantial fall in oil prices since the start of the year. "They have been very quick to put prices up but they are very, very slow to drop them," Choice spokesman Tom Godfrey said, adding that fuel surcharges were a "mechanism they used to bolster profits." Qantas last raised fuel surcharges in July, the second time since the start of this year. The airline aligned its charges with alliance partner Emirates earlier this year by charging different fuel fees depending on the class of seat, instead of its previous policy of a flat charge for all passengers. Qantas charges a fuel fee of $340 for a one-way economy and premium economy ticket to the United States, and $390 for business class. On flights to Britain and Europe, it charges $285 for economy class, $385 for premium economy and $540 for first and business class. The airline introduced fuel surcharges in 2004, charging passengers up to $14 a sector on international flights and $6 for domestic services. While consumer groups are critical of the fees, investors want Qantas to keep surcharges at their present level to bolster its bottom line after the airline posted the largest loss in its history last financial year. "If Qantas can hold the fuel surcharges without having to pass it on to customers, this presents further material upside to our [earnings] forecasts [for the airline]," Macquarie analysts said last week. The surcharges are an expensive irritant for Qantas passengers who use frequent-flyer points to pay for their flights. The airlines cannot dramatically increase overall ticket prices by raising surcharges because travellers would opt for rival carriers that do not impose the extra charges. However, they can boost revenue from travellers redeeming frequent-flyer points because their loyalty schemes often do not cover the fuel surcharges. Qantas said its surcharges did not come close to recovering the cost of fuel, pointing out that it had more than doubled over the past decade. While the trend of lower prices was positive, the airline said it would need to see a more sustained and significant benefit before it would be in a position to revisit its fuel surcharges. Virgin Australia last increased surcharges on flights to the US in August last year, charging $680 in fees for a return flight from Sydney to Los Angeles. However, the airline's passengers who use frequent-flyer points to pay for their tickets are not charged extra. A spokeswoman said Virgin constantly reviewed its surcharges, and looked for a sustained trend in fuel prices to decide whether to raise or cut them. Neither Qantas, Jetstar nor Virgin impose fuel surcharges on domestic flights.