Malaysia Airlines to hike fuel surcharge

Malaysia Airlines to hike fuel surcharge
Associated Press 06.12.08

KUALA LUMPUR, Malaysia -Malaysia Airlines said Thursday it will raise its fuel surcharge within the next few weeks to cope with rising global oil prices.

Chief Executive Idris Jala said many airlines have increased their fuel surcharge and are likely to further raise it in the coming weeks as world oil prices shoot past $130 a barrel.

"Similarly, Malaysia Airlines will increase fuel surcharge in the next few weeks on a route-by-route basis," he said in a statement.

"Our surcharge will continue to remain competitive as we would not want our planes to be empty by overpricing. We will monitor this closely," he said, adding that details of the hike in surcharge will be released later.

Jala was quoted by national Bernama news agency as saying the industry was facing one of its worst crises, with many carriers on the brink of bankruptcy because of rising jet fuel costs.

Airlines have been struggling to contain costs this year as oil prices have skyrocketed.

Scores of startup airlines have even gone out of business. Several major carriers announced plans to boost fuel surcharges, add a baggage surcharge, reduce capacity, defer plane orders or shed jobs.

The International Air Transport Association, which represents more than 240 airlines around the world, forecast earlier this month that the industry will lose $2.3 billion this year because of hikes in oil prices.

The latest forecast uses a consensus oil price of $106.50 per barrel of crude, but prices have since shot past $135 a barrel.