Air Malta to ditch fuel surcharge... eventually

Air Malta plans to eliminate the fuel surcharge slapped on passengers' tickets but is waiting until November to make the move even though the cost of jet fuel oil has fallen drastically in the past months.

Passengers flying on the national airline are paying a steep €50 fuel surcharge on most return flights to Malta, while flying to Moscow, Sofia, Istanbul, Manchester and Birmingham are forking out an additional €2 because of the flight's longer duration.

An Air Malta spokesman confirmed the company had just decided to totally eliminate the "fuel surcharge part" on its tickets from November and would instead be adding "some" of the fuel costs to the original ticket price, without specifying the amount.

Air Malta originally introduced the fuel surcharge in April 2004 and increased it every time the price of fuel went up. In July the price of jet fuel reached a peak at $147 a barrel. But since then it has plummeted.

Major international airlines have reduced their fuel surcharge but Air Malta has held out and will be retaining the full €50 for another six months during its peak season.

The airline's reasoning is that the surcharge does not cover the full added fuel burden the company is incurring.

"Despite having raised the fuel surcharge a couple of times over the last few years, Air Malta had made it clear the price increases were only covering a minor percentage of the rise in fuel costs being borne by the airline," the spokesman said.

According to the company, it was committed to meet the remaining shortfall through further cost reductions and increased efficiencies.

The airline added that the price of fuel had a massive impact on its financial performance. Its average fuel cost during the last financial year (which ended on March 31) was $115 per barrel.

These figures show the financial extent to which the airline was hit when, at the height of the tourist season, it had to buy fuel at record high prices.

"Due to these increases in 2008 Air Malta has seen its fuel bill rise by €30 million," the spokesman added.

The bill this year should be much lower than last year's because according to the international airline trade body, IATA, the average fuel price for 2009 should be at $57.7 a barrel.

Admitting that fuel should be cheaper this year, Air Malta said it had decided to eliminate the fuel surcharge within six months. KM tickets from November are already being sold without a fuel surcharge on Air Malta's web portal.