Aug. 20 (Bloomberg) -- Qantas Airways Ltd., Australia's biggest airline, increased a surcharge on all tickets as the cost of jet fuel soared to a record. Qantas shares rebounded from a three-month low.

Jet-fuel prices climbed to $54.42 a barrel yesterday according to available data dating back to 1982 from oil-pricing service Platts. Qantas has hedged 70 percent of its fuel costs at an average price of $32 a barrel until June 2005, the airline said when reporting record earnings yesterday.

Qantas stock slid to a three-month low yesterday on concern that high fuel costs would erode profit growth. The surcharge boost may help to protect its earnings, analysts said.

The increased surcharge should "cover the gap between Qantas's 70 percent fuel hedging and the cost required to purchase the remaining 30 percent that's unhedged,'' said Jason Smith, an analyst at Citigroup Smith Barney, in a note.

Qantas shares rose 3 cents to A$3.30 at 1:40 p.m. in Sydney, the same price at which they were trading the day before the initial surcharge was announced on May 11.

The surcharge on domestic flights will rise to A$10 ($7) from A$6 a sector and to A$22 from A$15 for international sectors, Sydney-based Qantas said in a statement. A sector is a single journey including refueling stops.

Singapore Airlines yesterday said it would raise surcharges to as high as $12 from $5 on some of its flights. Air France, its KLM Royal Dutch Airlines NV unit and British Midland Airways also raised surcharges this month.

Airline Costs

Fuel makes up about a fifth of airlines' costs and represents Qantas's third-largest expense after labor and aircraft operating costs. The International Air Transport Association said last month higher jet-fuel prices were the "greatest threat to industry profitability,'' adding up to $6 billion in costs.

"Jet fuel is now more than $54 a barrel, almost double its price of $28 a barrel 15 months ago,'' Qantas Chief Executive Geoff Dixon said in the statement. The surcharge was introduced in May when jet fuel cost $44 a barrel.

Qantas's higher surcharge will take effect from August 26.

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