NEWS | Wednesday, 04 June 2008
As from 1 July, Air Malta will be raising its fuel surcharge tariff from €2 to €5 for each leg of its flights in view of the ever increasing rise in the price of crude oil, which last month touched the $135 per barrel.
In a statement issued yesterday evening, Air Malta said this was continuing to have a severe negative effect on the bottom line and financial performance of the global airline business.
In order to deal with the continued spiralling of fuel costs most airlines including Air Malta have over the past years applied fuel surcharges in an attempt to realign their revenues and operating costs.
Up to last year Air Malta’s fuel bill almost doubled over the past three years; an increase of €30 million in spite of fuel hedging agreements which the airline had successfully managed to conclude in the past. With the latest surge in Jet Fuel costs in recent months, the airline will incur a further €32 million increase in its fuel costs.
In the light of this situation as of 1 July 2008 the fuel surcharge on all Air Malta scheduled routes will increase by €5 per sector with the exception of flights to Catania, Palermo, Reggio and Tunis which will see an increase of €2, whereas flights to Rome, Milan, Bologna, Venice, Naples and Tripoli will increase the fuel surcharge of €3.
Air Malta’s fuel surcharge now stands between €11 per sector for the shortest routes to €25 per sector for its longer routes.
Air Malta’s current fuel surcharge had been revised in November 2007 when Crude Oil prices were around $80 per barrel and this new additional rate will hardly cover 15 per cent of the increase in annual fuel costs expected for this year.
The airline is committed to meet the gap through further cost reductions and efficiencies while at the same time seek further opportunities for revenue growth.
Commenting on these events Joe Cappello, Chief Executive of Air Malta said: “With the continued increases in Jet Fuel, at a time when crude oil price is poised to breach the $140 per barrel, we were faced with the need to continue stabilising our operational budgets to ensure the survival of the Company and to get the operation into sustainable viability.
“We had to take this corrective measure to realign our costs with the airline’s budgets. Most of our competitors have already taken similar measures and we expect others to follow soon,” he added.
04 June 2008
ISSUE NO. 538