AirAsia says no fuel surcharge before oil hits $100

Southeast Asia's largest budget carrier AirAsia said on Wednesday it has no immediate plans to impose fuel surcharges despite sharply higher oil prices.

AirAsia Chief Executive Officer Tony Fernandes told AFP that the carrier will only consider imposing a ticket surcharge if the New York crude futures contract hits 100 dollars a barrel.

Last week in Asian trade, New York's main contract, light sweet crude for delivery in March, rose 55 cents to $87.49 per barrel.

"So far (fuel cost) is very manageable. It is oscillating between 80 to 100 dollars a barrel. We are comfortable with it," the aviation tycoon said.

AirAsia's fleet is made up of fuel-efficient new Airbus A320 and A340 aircraft. In 2008, after the last major spike in energy prices subsided, the carrier abolished fuel surcharges on all its flights.

Australian flag carrier Qantas last week became the latest airline to raise its fuel surcharge on international flights, for the first time in three years, as it tries to compensate for the impact of rising oil prices. The move comes as crude prices continue to rise thanks to improving confidence in the global economy and unrest in Egypt, with the airline predicting costs will advance further this year. "That makes us even more competitive," Fernandes said of his rivals' surcharge decisions. "High oil prices are a blessing for us."

The outspoken entrepreneur said AirAsia has established a strong business model which can sustain high oil prices, adding that ancillary income from cargo, insurance and food sold on board was "very strong".

But he said the carrier could impose a 20 ringgit (6.25 dollars) fuel surcharge if it has to begin paying 100 dollars a barrel.

AFP