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AirAsia decides fuel surcharge is required

AirAsia will be reintroducing fuel surcharges on 3 May 2011 for all domestic and international routes, with bookings made before that date being unaffected by the surcharge.

The fuel surcharge, says AirAsia, is to “offset the escalating jet fuel price, which has exceeded $140 per barrel”. AirAsia abolished its previous fuel surcharge in November 2008, followed by the move to implement a No Admin Fee policy in 2009.

“The rising jet fuel prices and the continuous upward spiral caused by the situation in the Middle East and other external factors, have made it imperative for us to reintroduce the fuel surcharge, despite our best efforts to resist it for as long as we could,” explained Kathleen Tan, regional head of commercial, AirAsia. “We hope that this will only be a temporary measure, and AirAsia will continue to ensure our fares remain low despite the fuel surcharge, which is the lowest in the world. While other carriers were already adjusting fares and increasing fuel and administrative charges to counter rising operating costs when jet fuel price went above $100 per barrel on 2 March this year, the strong growth of our ancillary income has helped us delay the implementation of fuel surcharge for as long as possible.

“As the people’s airline, we insist on being transparent and decided to announce to our guests on the reintroduction of fuel surcharge,” added Tan. “AirAsia remains committed to its low-cost model and will not transfer the full cost of the fuel price hike to its guests, choosing instead to counter the spike by aggressively growing revenue through ancillary products and services. Our recent partnership with Expedia, the world’s largest online travel agency, and other initiatives currently in the pipeline will further increase our revenue from ancillary income.”

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