Australia's Virgin Blue ups fuel surcharge

SYDNEY, Dec 27 (Reuters) - Australian airline Virgin Blue Holdings Ltd (VBA.AX) said on Thursday it will increase its fuel surcharge for domestic flights by 26 percent due to higher jet fuel prices.

Virgin Blue, which is 62 percent owned by Toll Holdings Ltd (TOL.AX), said the increase was the first in nearly three years and would take effect after midnight on Feb. 1.

Passengers on domestic flights would pay a A$24 ($21) surcharge, up from A$19, while the surcharge on international flights operated by Pacific Blue and Polynesian Blue would rise to A$45 from A$35.

Virgin Blue said the price of jet fuel had risen to $112.60 a barrel from $66.33 a barrel in April 2005, when it last raised the surcharge.

The airline said in October it had hedged 55 percent of its fiscal 2008 fuel needs at $63 to $75 a barrel.

Virgin Blue shares last traded up 3.5 percent at A$2.05, outpacing an overall market up 0.5 percent. ($1=A$1.15) (Reporting by Richard Pullin)