Malaysia Airlines brings back fuel surcharge

KUALA LUMPUR: Passengers will pay more to fly Malaysia Airlines as the national carrier has reinstated a fuel surcharge on its ticket price from Sept 18, 2018 as oil prices continue to rise.

The last time it imposed a fuel surcharge was in 2013 when it was still operating under the old company — Malaysian Airline System Bhd.

In a statement posted on its website, Malaysia Airlines Bhd said it is reintroducing and implementing a fuel surcharge for tickets issued or re-issued for travel on all its flights originating from Malaysia effective Sept 18 in line with rising fuel prices and consistent with most international carriers across the globe.

Under the changes, economy class passengers to destinations within Malaysia and Asean will be levied an extra RM4 per trip, while for destinations in the Middle East and South Asia the levy is RM8.

For trips to North Asia and Greater China, and Australia, New Zealand and Europe, the surcharges are RM12 and RM16 respectively.

For business passengers, the surcharge for domestic and Asean routes is RM8, while for long-haul destinations it ranges from RM12 to RM24.

Earlier on Aug 13, Malaysia Airlines had re-introduced the fuel surcharges for its inbound flights by between US$1 (RM4.13) and US$12.

Travellers on the airline’s flights from Asean countries to Malaysia, for example, now pay a surcharge of US$1 on economy class and US$2 on business class, while the levy from North Asia and Greater China is US$3 (economy) and US$4 (business). For those flying from Australia, New Zealand to Malaysia, the surcharge is US$4 (economy) and US$6 (business/first).

The surcharge for Malaysia Airlines flights from Australia, New Zealand to Europe, meanwhile, is US$8 (economy) and US$12 (business/first).

The fuel surcharge comes as Singapore jet kerosene spot price closed at US$88.46 as of last Friday. Year-to-date, it is up 14%.

A fuel surcharge mechanism helps airlines to pass on part of their fuel bills — a major operating cost for airlines — to customers due to volatile oil price movements. Fuel surcharges are not part of the basic airfare and may be reduced or removed depending on the price of jet fuel in the market.

Malaysia Airlines group chief executive officer Izham Ismail had in a Sept 8, 2018 interview with The Edge Malaysia weekly identified rising fuel costs as one of the airline’s top challenges, pushing back its profitability targets by another year. Fuel accounts for 36% of Malaysia Airlines’ total costs.

Apart from Malaysia Airlines, Cathay Pacific Airways and sister carrier Cathay Dragon have reportedly added a fuel surcharge of HK$652 (RM344.78) to air tickets starting this month to cover rising jet fuel costs.

However, tickets issued by Singapore Airlines and SilkAir no longer show a fuel component as the airlines had removed the surcharges as a separate fare component and folded them into base airfares since March 2017.

In January 2015, Malaysian budget carrier AirAsia Group Bhd and its long-haul associate AirAsia X Bhd had introduced a no-fuel-surcharge policy across all of their airlines.

Source: TheEdgeMarkets