BackAirAsia abolishes fuel surcharge across all its airlines
The abolishment of fuel surcharge will further reduce travel costs and stimulate more demand for travel and tourism
Premium
Mumbai: Malaysia-based AirAsia Bhd on Monday said it’s abolishing fuel surcharge effective Monday across all its airlines, including its Indian unit AirAsia India, because of declining global oil prices.
Airlines have used the fuel surcharge as a measure to increase ticket prices corresponding with increasing jet fuel prices.
AirAsia’s group chief executive officer Tony Fernandes said AirAsia India will also abolish fuel surcharge along with its low-cost long haul affiliates AirAsia X Bhd, Thai AirAsia X Co. Ltd and Indonesia AirAsia X.
The abolishment of fuel surcharge will further reduce travel costs and stimulate more demand for travel and tourism, AirAsia said in a statement on Monday.
AirAsia was the first airline to abolish fuel surcharge for all its domestic and international flights back in 2008. Rocketing fuel prices forced the airline to re-introduce the surcharge in 2011.
Brent crude has fallen 58.23% from $115.06 per barrel on 19 June 2014. Jet fuel prices have fallen by 25.12% during the same period.
In India, fuel costs make up some 45% to 55% of the revenue of domestic airlines and a 4% reduction in the fuel cost may potentially add around 2% to the operating margin of airlines.
“We are a high-value, low-fare airline and we will continue to strive to make flying as affordable as possible. This decision has been made in November 2014, which was in line with declining global oil prices," Fernandes said.
“However, we are only able to implement it now, but we believe removing fuel surcharge and reducing travel costs will be a huge boost to the tourism industry. This will be a plus point for consumers, but the economy will also benefit from this as the tourism industry is a great job creator," Fernandes added.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
