Air fares to rise, despite falling fuel charges

Airlines are slashing fuel prices to match falling oil prices - but fares could still go up.

Airlines including Japan Airlines, AirAsia and Virgin Australia are among those who have phased out fuel charges, with others expected to follow suit.

But having scrapped fuel surcharges, many are now bumping up flight prices to make up the difference in its margins, reports the Telegraph.

Qantas became the latest airline to eliminate the fuel surcharge. However, it admitted that it would now be raising fares as oil was not cheap enough to offset the impact of competition on international routes, reports CNBC.

According to the Telegraph, the Australian Competition and Consumer Commission said it would investigate airlines suspected of misleading consumers through fuel surcharges.

Singapore Airlines Ltd (SIA), however, has said it would continue its surcharge, which is among the highest in Asia.

"It should be noted that while fuel prices have come down in recent months, the fuel surcharge continues to provide only partial relief against SIA's high operating costs from the price of jet fuel," said the airline in a statement.

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