Virgin Australia will raise fares by between $1.50 and $6 in response to the carbon tax, a slightly lower surcharge than the one earlier announced by Qantas.
The fare hike will go into effect alongside the federal government’s carbon pricing scheme on July 1. The surcharge will add $1.50 to one-way flights of up to 900 km, $3 to flights between 901-2000km and $6 to flights over 2000km.
Virgin said it would also levy an additional $2.80 surcharge on codeshare flights with Etihad Airways to Europe in response to the EU’s Emissions Trading Scheme.
Qantas earlier this month announced a carbon tax surcharge of up to $6.86 per flight as part of larger fare increases blamed on high fuel costs.
Virgin has said it believes the carbon tax, initially set at $23 a tonne, will cost it between $45 and $50 million per year. Qantas has put its cost at $110 to $115 million.