Air Malta not to follow BA footsteps in surcharge reduction
Charlot Zahra
Air Malta said it was not going to reduce the hefty fuel surcharge it currently charges on its scheduled flights despite the fact that since the surcharge was introduced on 1 July, price of crude oil on the international markets had plummeted by more than 66 per cent in a five-month period.
In fact, during this period, the price of crude oil went down from a historic high of US$147 per barrel to US$52 per barrel yesterday.
However, when asked whether the national airline was considering removing or reducing the fuel surcharge on airline tickets, which currently ranges from €11 per sector for the shortest routes to €25 for its longer routes, an Air Malta spokesperson said: “Air Malta is closely monitoring the situation and will announce any changes to its fuel surcharge in due course.”
He conceded that Air Malta had introduced its latest fuel surcharge in July 2008 when crude oil prices were around US$135 per barrel “but as explained in our press release in May, this increase was restricted to cover less than 15 per cent of the higher fuel costs,” the national airline’s spokesperson claimed.
“This has been Air Malta’s practice every time it increased its fuel surcharge, relying on further cost savings in its operations and fuel hedges to cover the rest of its fuel cost increase.
“Consequently, the current surcharge covers only a fraction of the airline’s current fuel costs,” the Air Malta spokesperson claimed.
He added that there was “a substantial difference” between the price of crude and aviation fuel which included “refinery costs, transportation and in-aircraft charges to reflect storage and logistics”.
“These costs have increased at an even higher rate than the price of crude and this has also had a substantial impact on our fuel costs, independently of the price of crude,” the Air Malta spokesperson insisted.
He added that there was “a notable time lag from when the headline price of crude falls, to when the airlines start benefiting from lower cost of jet fuel, which they can then pass to consumers.”
Air Malta also claimed “it took the airlines several months between the increase in the price of aviation fuel to the time when fuel surcharges were passed on to the passengers through tour operators since brochure prices and conditions had to be respected”.
On 1 July 2008, the surcharge on all Air Malta scheduled routes increased by €5 per sector, with the exception of flights to Catania, Palermo, Reggio and Tunis which saw an increase of €2. The surcharge on flights to Rome, Milan, Bologna, Venice, Naples and Tripoli increased by €3.
However, other foreign airlines such as British Airways did reflect the rising and falling price of oil in their fuel surcharge to customers during the year.
The last fuel surcharge increase on British Airways’ First, Club World, Club Europe and World Traveller Plus tickets took place in June 2008.
In October the fuel surcharge was reduced on all World Traveller and World Traveller Plus tickets.
World Traveller (Economy Class) passengers are paying €17.00 less per sector for long haul flights of 9 hours or more and €16.00 less per sector for long haul flights under 9 hours.
The World Traveller Plus (Upgraded Economy) passengers are paying €8.00 less for longer long haul sectors and €6.50 less for shorter long haul sectors.
