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Qantas predict increased fares after new carbon trading scheme announced by government

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Qantas chief executive Geoff Dixon has criticised the government’s new carbon trading scheme, saying it will force the airline to increase fares and will severely impact its domestic and regional operations.

Dixon told a briefing last Friday the airline will have no choice but to increase fares after the aviation after the aviation industry was “singled out” by the government. He said the government’s failure to offer the aviation industry rebates as part of its Carbon Pollution Reduction Scheme could add another $100 m to Qantas’s costs.

“Aviation has been singled out. Domestic and regional aviation will be quite significantly affected because we can’t absorb this extra $100m cost,” Dixon said.

He said Qantas will be forced to pass the extra cost onto consumers. “It could even have an impact on domestic tourism,” Dixon said. “This will be a big impost. We will have to increase fares and while it doesn’t apply internationally, it has the potential to make it more difficult for us internationally.”

Under the system the government will place a cap on how much carbon pollution the industry can produce, selling permits up to that limit. Industries who wish to breach their carbon emissions level will need to purchase permits from each other.

Qantas will table its concerns with climate change minister Penny Wong, Dixon added.

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