Qantas is changing the way it applies fuel surcharges on international flights, but the move doesn't mean cheaper fares for all passengers.
The airline is restructuring its international fares to include its fuel surcharges, which will benefit its frequent flyers but won't reduce ticket prices.
Up until now, passengers using frequent flyer points have had to fork out money to cover fuel surcharges and taxes, so the airline says the changes to its ticket structure could save frequent flyer economy passengers flying overseas up to $110.
The move comes as the Australian Competition and Consumer Commission investigates whether Qantas and rival Virgin Australia have misled consumers by maintaining surcharges on international flights despite plummeting oil prices.
Virgin has already moved on surcharges, announcing last week it would roll the charge into its base fare and reduce the price of an economy ticket to the US by $40.
Qantas chief executive Alan Joyce said airfares were driven by competition, not fuel costs, and had been falling for years.
"It is competition that is the big driver of airfares both internationally and domestically," Mr Joyce told reporters.
Still, with an annual fuel bill of around $4.5 billion, the airline expects a hefty windfall from the fall in oil prices - which have more than halved in the space of six months.
Mr Joyce said it would benefit the airline's struggling international division and allow it to invest in its operations - including buying new aircraft and upgrading lounges.
"We are seeing significant benefit coming through on fuel and that will help our international business get back into profits and it will help Qantas invest in the customer," he said.
A lower Australian dollar had also provided numerous positives for the airline, including a boost in domestic travel as Australians opt against trips overseas.
"Because we have only 18 per cent of the international market but 65 per cent of the domestic market we get a bigger benefit associated with that," Mr Joyce added.
Qantas shares were 3.5 cents higher at $2.375 at 1515 AEDT.
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