Australian airlines pass on costs to consumers

Australia’s major airlines have said that they cannot absorb the higher cost of fuel when the carbon tax kicks in next year and will be passing the cost onto consumers.

Qantas said 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.

In terms of the bottom line, Qantas said it expected the carbon plan to cost the airline group - comprising full service Qantas mainline and low-cost offshoot Jetstar - between $110 million and $115 million in 2012-13.

"In the context of the significant challenges facing the global aviation industry, the Qantas Group will be unable to absorb the additional costs associated with the carbon price," the airline said in a statement. "There will be a full pass-through to customers."

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