With a 40% drop in fuel prices, will Qantas reduce its fuel surcharge?

I'm sure this has been raised here previously ( I cant see it) however is it fair to assume that with a 40% drop in fuel prices in the past 6 months and NO drop in fuel surcharges from Qantas (who squeal the loudest) there will never be a reduction in the fuel levy?

It is a good question, and in my view it has a simple answer. The purpose of the fuel surcharge is to componentise the costs and pricing, and then be able to broaden the customer base who pay the component, in this case specifically redemption seats. In other words, it is a scam to devalue loyalty points in a sly way.

Without having knowledge of QF's fuel price hedging, I would suspect we wont be seeing them reduce the fuel surcharge until there is strong competetive or regulatory pressure to do so, as it may very well be a significant contributor to their return to profitability. Remember that whenever it is lowered, this has the effect of increasing the real purchasing power of loyalty points. A bit like Newtons 3rd law in at work.

From a layperson's perspective - yes, however the answer is no. QF and other airlines hedged their fuel prices far ahead at the older (more expensive) prices. In time, perhaps - if oil prices stay low. 

paa beat me by 37 seconds, well done :)

All airlines will continue to charge us as much as they can and none will reduce price because of fuel, yet all of them saying that vast majority of cost is fuel. If oil stays low for a year or so then you may expect some price reduction due to competition. Meanwhile airlines will enjoy extra profit.

I suggest make a good use of low petrol prices and travel inside Australia by car – believe me there are plenty to see.

They key to avoid the pinch from fuel surcharge is to pay outright for flights. The fuel surcharge is designed to ensure airlines cover some marginal cost for flight redemptions. When purchasing flights outright, the market is competing on total cost irrespective of the breakdown. Save your points/mileage for upgrades.

It will be interesting to see if the fuel surcharge goes up when fuel prices start to rise again !!

According to Flight Centre the fuel surcharges are designed to reduce the commission paid to travel agents. I still don't understand how they can reasonably argue there needs to be a spearate fuel levy. You run an airline, one of your costs is fuel & it should be included in the price. If it was a logical to seperate we'd have a staff surcharge etc It's a joke & should be out-lawed. Price should be fare + taxes (real taxes) only