Surging fuel prices has forced Virgin Blue, a low cost Australian airline, to cut flights and increase airfares. The airline has announced they will cut flights connecting Melbourne and Darwin and add $5 to most of its ticket prices in response to surging fuel costs.

According to Brett Godfrey, chief executive for Virgin Blue, these recent changes are part of a £50 million plan to cut costs. The Melbourne to Darwin route will be cut this August; this service currently runs 3 times a week. After the route is axed future passengers will have to fly via Brisbane says Mr Godfrey. The Sydney to Prosperine flight weekly route has also been cut to try to reduce the airlines annual fuel bill.

According to Virgin Blue, their annual fuel bill is increasing at an unprecedented rate; their bill this year is predicted to exceed $500 million, which is 21% more than 2007.

Brett Godfrey stated that “It’s not a case of planning interim measures to offset a spike in the cost of fuel – all airlines must come to terms with a new reality in our industry”. Virgin Blue is responding to rising fuel costs by adding $5 to 55% of their domestic flight fares.

Having monitored global fuel prices the airline have introduced these initiatives in order to cut back spending, in the hope to reduce future fuel costs which currently account for 35% of the company’s total expenditure. Virgin has announced that staff redundancies will not be part of these initiatives.

The low cost airline has said that it will not reduce or cut flights on routes to New Zealand, the Pacific Islands or their Trans-Tasman service.

http://www.virginblue.com.au/index.htm