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No Fare Reduction Despite Scrap of Carbon Tax Surcharge – Qantas

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By Esther Tanquintic-Misa | July 11, 2014 1:03 PM EST

There won't be any fare price reductions even if the carbon tax surcharge gets scrapped, Australian flag carrier Qantas Airways said this week.

Moreover, it stressed that whatever savings that will be generated from the repeal of the carbon tax of between $2-$7 won't be passed on the consumers.

"Given the level of competition and the unique pressures in the domestic aviation market, we haven't been able to recover the cost of the carbon tax through price increases as we originally intended," Qantas said in a statement.

Qantas isn't alone. Rival airlines Virgin Australia won't also be giving out incentives to its patron flyers.

As expected, consumer groups lashed at the scenario.

"It's not fair. Obviously business should be handing on any savings from the repeal of the carbon tax straight to consumers," Tom Godfrey from Choice told 3AW Mornings. "It's just wrong. The savings should be passed straight through... clearly prices should come down."

"The government made a big deal of the fact that families were going to be better off, but it seems not business is completely ignoring the government."

Qantas explained the carbon surcharge was added on to fares and then retained to enable the airline monitor how much the tax was costing its operations.

"Our all-inclusive fares have not risen, though we have kept a small carbon surcharge on domestic fares so that we can keep track internally of the cost of the tax," the airline said. "This has now been removed, but there won't be any change to the prices that customers pay."

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