Air Malta raises surcharge as oil price soars

Air Malta will raise its fuel surcharge as from July 1 in the wake of the spike in international fuel prices.

The fuel surcharge on all the airline's scheduled routes will rise by €5 per sector with the exception of flights to Catania, Palermo, Reggio and Tunis, which will see an increase of €2. The surcharge on flights to Rome, Milan, Bologna, Venice, Naples and Tripoli will increase by €3, the airline said.

Air Malta's fuel surcharge will vary between €11 per sector for the shortest routes to €25 per sector for its longer flights.

The airline said that, up to last year, its fuel bill almost doubled over the past three years: an increase of €30 million in spite of fuel hedging agreements. "With the latest surge in jet fuel costs in recent months, the airline will incur a further €32 million increase in its fuel costs".

Air Malta recalled that it last revised its fuel surcharge in November 2007 when crude oil prices stood at about $80 per barrel. The new additional rate, it pointed out, will hardly cover 15 per cent of the increase in the annual fuel costs expected for this year.

The airline said it is committed to meet the gap through further cost reductions and efficiencies while at the same time seeking further opportunities for revenue growth.

"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," CEO Joe Cappello said.