Print

Mail

wiki links

Budget carrier introduces fuel surcharge for first time

"[We will] consider reducing or scrapping the fee if fuel prices returned to normalized levels."

Tony Fernandes, AirAsia chief executive officer

Budget carrier AirAsia said on Monday that it will introduce a fuel surcharge on its flights for the first time from tomorrow as part of efforts to combat spiraling fuel costs.

"Fuel is the single largest cost component for the company; the fuel surcharge will allow the company to alleviate the escalating fuel costs," the carrier said in an announcement to the stock exchange.

AirAsia said the surcharge would be 5.0 ringgit per sector (US$1.32) for flights within Malaysia, 10.0 ringgit per sector for flights to East Malaysia and 25.0 ringgit per sector to Thailand, Indonesia, Macau and the Philippines.

"The fuel surcharge is expected to contribute positively to AirAsia's consolidated earnings for the financial year ending 30 June 2006," it said.

"There is an urgent need for the government to resolve the calls for domestic air-services rationalization," AirAsia's chief executive officer Tony Fernandes was quoted as saying by the official Bernama news agency.

"The move would mutually benefit both [Malaysia Airlines] and AirAsia as a consolidation can help airlines curb high operational costs due to spikes in fuel prices," added Fernandes, who recently said both airlines were in negotiations over domestic routes.

AirAsia's announcement follows a similar move by Malaysia Airlines, which last week said it will raise its fuel surcharge for international travel from Friday.

Fernandes said AirAsia would monitor the situation and "consider reducing or scrapping the fee if fuel prices returned to normalized levels."

AirAsia, which launched as a budget carrier in December 2001 with just two aircraft, is now Southeast Asia's biggest low-cost carrier in terms of fleet size.

Meanwhile, AirAsia said yesterday it has resumed talks with Hong Kong on launching flights there, saying the territory's officials seem open to the possibility.

"Yes, some of our officials have been there for talks," a spokeswoman for the Malaysian-based airline said on condition of anonymity.

Her comments confirm a report in Hong Kong's South China Morning Post newspaper on Monday that AirAsia and Hong Kong Airport Authority officials have resumed negotiations on the issue, about a year after they ended abruptly.

Neither side explained why the talks broke down, but there has been speculation that the high costs of using Hong Kong's airport were the main factor.
This story has been viewed 2262 times.