Air travel likely to cost more with rising fuel prices

PETALING JAYA: Air travellers are facing the possibility of paying higher fares as airlines struggle with escalating fuel prices in view of the turmoil in the Arab world. “Depending on the continuation of the Middle East crisis, we may adjust our all-in fares over the next seven days,” MAS executive vice-president (sales and marketing) Datuk Bernard Francis said. Hinting that air fares might see an increase very soon, he pointed out that “minor adjustments” to the fuel surcharge had already been implemented two weeks ago.

On Wednesday, CNNMoney reported that US oil prices momentarily hit US$100 a barrel for the first time in two years amid reports that Libyan oil production was shutting down. The price was at the highest level since 2008. At a briefing to announce its full results for 2010, MAS managing director and CEO Tengku Datuk Seri Azmil Zahruddin said the airline was monitoring fuel prices and the crisis in the Middle East before determining if there was a need for an increase. “The possibility of an increase will depend on the direction the crisis takes,” he said. MAS has been imposing a fuel surcharge on its passengers since 2008.

Many international airlines, including Australia’s Qantas Airways and British Airways, have already increased their fuel surcharge. The International Herald Tribune reported yesterday that US airlines had raised their fares four times since last month, compared with just three price revisions last year. Even low-cost carriers in the United States were not spared although they had always tried to beat their rivals in terms of pricing.

Low-budget airline AirAsia, which does not impose a fuel surcharge, has indicated that it might have to introduce the additional charge to cope with escalating fuel prices. On Thursday, its group CEO Datuk Seri Tony Fernandes said the low-cost carrier would keep tabs on oil price movements. He conceded that “the introduction of a fuel surcharge cannot be discounted if the current price is sustained or rises further.” “We will be able to implement a fuel surcharge within 24 hours of the decision should fuel prices climb and stay high,” he was quoted as saying. During an interview yesterday, AirAsia X chief executive officer Azran Osman-Rani said it was “too early to tell” but confirmed that they were studying the possibility of increasing air fares.

-thestar online.