SYDNEY (Reuters) - Australia's Qantas Airways said on Thursday it will raise its fuel surcharge on international fares and increase domestic fares due to higher fuel costs and the European union's carbon pricing scheme.

The airline, whose fuel bill climbed by almost a quarter to A$2.2 billion for the six months to December 2011 to the highest in 4 years, said the international surcharge would climb by between A$20($21.47)and A$60 a ticket.

Domestic fares would go up by an average of 2.5 percent, it said.

Qantas said it has hedged 86 per cent of its remaining fuel requirement in 2011/12 at a worst case crude oil price of $121 per barrel.

($1 = 0.9316 Australian dollars) (Reporting by Narayanan Somasundaram; Editing by Ed Davies)