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Airline to raise fuel surcharges

Singapore Airlines yesterday announced that it is raising fuel surcharges to offset the impact from surging jet-fuel costs.

Starting yesterday, the fuel surcharge for flights between Singapore and Kuala Lumpur will be increased from US$4 to US$10 per sector, the company said in a statement.

All long-haul flights, including the Taipei-Los Angeles route, will see the surcharge increase from US$22 to US$30 per sector, starting on Friday.

A sector is a single journey including refueling stops.

Despite the adjustment, the company said it will still not be able to cover the increased costs from recent record prices for jet fuel. At US$70 per barrel, the additional fuel cost to the airline will be in excess of US$300 million for the 2005-2006 financial year.

The price of jet fuel has risen steadily, to more than US$70 per barrel last month from US$58 per barrel in November last year, when the current surcharge was set. Crude oil prices have seen smaller increases, rising to US$52 per barrel from US$49 per barrel over the same period.

Surcharges will remain unchanged at US$12 for the Taipei-Singapore flight, and US$10 for all flights between Singapore and Bandar Seri Begawan, Bangkok, Manila, Penang, Jakarta, Surabaya, Denpasar, Ho Chi Minh City and Hanoi.

According to statistics provided by the International Air Transport Association on April 4, soaring fuel costs may result in combined losses of US$5.5 billion this year for airlines worldwide, based on an average price for crude oil of US$43 a barrel.

Domestic carriers, including China Airlines (華航) and Eva Airways Corp (長榮), said they have no plans to follow suit, although rising fuel costs are putting pressure on company profits.

Meanwhile, the nation's four smaller air carriers -- TransAsia Airways (復興), Far Eastern Air Transport Corp (遠東), UNI Airways Corp (立榮) and Mandarin Airlines (華信) -- expect that their applications to raise fares on domestic routes will be approved by the aviation regulator soon.

"Following negotiations with the Civil Aeronautics Administration since the end of last year, we expect that our applications will get the go-ahead next month to cover rising fuel costs," said Hanson Chang (張有朋), senior public relations manager for Far Eastern Air Transport Corp.
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