Qantas has cut fuel surcharges on its international flights in a move that will save frequent flyers money but won’t reduce fares.

Following a similar move from rival Virgin Australia last week, the airline has announced it will lower the fuel surcharge on flights to up to 200 destinations worldwide.

But the move doesn’t mean Qantas passengers will pay less.

That’s because what the airline is really doing is restructuring its prices so that base fares are increased to compensate for the lower fuel charge.

So customers will pay the same amount to fly, unless they are booking with frequent flyer points.

Qantas passengers can use points to cover the cost of base fares but still have to pay fuel surcharges and the airline says the changes to its ticket structure could save economy passengers flying overseas up to $110.

The decision to keep total fares prices the same contrasts to Virgin Australia’s announcement last week it would reduce economy ticket prices to the US by $40 after moving to include fuel surcharges into the base fare.

Qantas chief executive Alan Joyce said the airline was already offering competitive prices and it had already moved to undercut Virgin by launching a new sale.

The move from both airlines comes as the Australian Competition and Consumer Commission investigates whether the two airlines have misled consumers by maintaining surcharges on international flights in the face of sliding oil prices.

Oil prices have more than halved in the past six months due to overproduction and soft demand.

But Joyce said rising costs and tough competition had hurt the airline’s profit margins over the past decade and Qantas planned to take advantage of lower oil prices to invest in its operations.

“In a highly competitive environment where customers are already paying less than they were several years ago, lower oil prices can help put the industry on a more sustainable footing,” he said.

“It means airlines are in a better position to invest in the new aircraft, new lounges and new routes that ultimately benefit customers,” he said.

– AAP