AIRFARES to King Island are set to rise despite a Tasmanian Government subsidy being paid on certain flights.
The rising price of fuel has prompted Sharp Airlines to increase airfares by six per cent in coming weeks.
It goes against the trend elsewhere in the country where cheap flights and travel deals are attempting to refloat the sector in the wake of the Covid-19 pandemic.
The jet fuel price has soared since the Russian invasion of Ukraine.
Sharp Airlines managing director Malcolm Sharp said the company could no longer continue to absorb the higher costs.
“Sharp Airlines has endeavoured to absorb these global fuel price increases but they are no longer in a position to continue absorbing the rising costs of fuel,” Mr Sharp said.
“Fuel represents about 20 per cent of our operating costs.
“As a result: over the course of the next week, we wish to advise that our airfares will increase by approximately six per cent.
The fuel-related increase will be reviewed monthly.
“Once our fuel costs reduce to a sustainable level, we will decrease the amount and that will be reflected in an airfare reduction,” Mr Sharp said.
The airline’s CEO Dallas Hay confirmed the price hike would be applied to all passenger flights.
The Tasmanian Government has put in place an underwriting agreement with Sharp Airlines to introduce a “Red Hot Winter” return fare of $300 per person between Hobart and King Island for a limited number of seats on its three weekly services.
It followed a public health warning for people to avoid travel to King Island during a Covid outbreak earlier this year.
The special limited fare offer went on sale on February 14 for flights from Hobart to King Island from May 1 through until the end of July 2022.
The incentive package includes a $100,000 state-funded marketing campaign principally targeting Victorians to travel to King Island during the off-peak/winter season.
The winter airfare promotion is in addition to the Government’s extension of their underwriting agreement with Sharp Airlines flights between both Hobart and King Island and Flinders Island.
This agreement was designed to establish a new air route and to encourage Southern Tasmanians to travel to the islands, which were particularly vulnerable due to international and mainland tourism loss due to Tasmanian pandemic border closures.
Mr Hay said while the fuel recovery levy would be applied to all routes within the Sharp network a levy on freight was not envisaged at this time.