Skywest reduces ticket prices

Air passengers travelling with Skywest will be able to save a few dollars with the recent decline in oil prices prompting the airline to decrease it fuel surcharges, however Qantas and Virgin Blue have indicated they won't be moving any time soon to cut their airfares.

As of Monday Skywest said fuel surcharges will decrease $4 for each aircraft type, with the fuel levy surcharge decreasing to $37 for turbo-prop routes and $39 for jet routes.

Skywest has previously said it will monitor its fuel surcharge on a monthly basis and tie future price movements in the cost of aviation fuel.

"After the consistent increases of recent months, Skywest is pleased to be able to lower its fuel surcharges and pass this saving back to its passengers." Chief executive Paul Daff said.

Skywest joins rural carrier Regional Express in reducing levies in response to lower fuel prices, however the latter said it was too early to make a second reduction.

Meanwhile Qantas and Virgin Blue have indicated their airfares will not be following the weaker oil price path.

Crude oil, from which jet fuel is derived, is currently trading around $US102 a barrel, significantly lower than its record levels above $US147 a barrel in July.

Singapore Airlines has reduced ticket prices for some international flights and consumer group, Choice, has urged Qantas to review its fuel levies.

But Qantas said today that despite the easing of oil prices recently, the oil market remains volatile.

"While there has been some downward movement in the price of oil, the market is still volatile," a Qantas spokesperson said.

"The last time Qantas announced an increase to fuel surcharges was on January 7.

"At that time, the price of crude oil was $US95 per barrel. Today crude oil remains around $US105 per barrel.

"At current prices even with fuel hedging measures in place, the Qantas group's fuel bill will be about $1.5 billion higher this year than the previous financial year."

Virgin Blue said it is watching the movement in fuel prices closely and is reviewing its position.

"From Virgin Blue's perspective, we would like nothing more than to do so and are watching closely and reviewing our position," Virgin Blue spokeswoman Amanda Bolger said.

Regional Express reduced its fuel surcharge by $4 to $40 on August 1.

"We obviously monitored what had happened through July and between the beginning of July and the later part of July we saw the fuel prices ease throughout that month," Rex general manager, network strategy and sales, Warrick Lodge said.

But Mr Lodge said it was too early to cut the fuel levy again given a falling Australian dollar exchange rate, which has cancelled out the savings made on the lower fuel prices.

"Since August 1 we have nearly seen a comparable fall in the jet fuel price to the exchange rate in percentage terms," he said.

"So that weaker Australian dollar, which is down at around 80 US cents, is actually taking away some of the benefits in the jet fuel reductions as its purchased in US dollars."

Mr Lodge said since the beginning of August there had been around a 13 or 14 per cent reduction in jet fuel, about the same reduction as there has been in the value of the Australian dollar.

"So those two things since August 1 lead us to conclude that it is really too early to follow that first fuel levy reduction up with another one already."