Budget airline AirAsia has just announced that it will be adding a fuel surcharge for every booking due to rising fuel costs. Capital A CEO Tony Fernandes already hinted at the move yesterday, saying that fuel will be expensive in the short term and will cause fares to go up.
Starting from 8 March, domestic flights will have a surcharge of RM10 while international flights will cost an extra RM25 to RM60 depending on the duration. It will only be imposed on new bookings from 8 March onwards, so existing bookings will not be affected.
AirAsia says that this is the first time it is charging fuel surcharges since 2015, and the company says that it hopes the measure is only temporary. AirAsia Malaysia CEO Riad Asmat explains that the situation is no longer sustainable as oil prices have shot up 160% since 2015, partly caused by the Russia-Ukraine conflict.
Prices have not gone above US$100 per barrel since 2014, but Brent Crude oil is now priced at US$118 (RM493) per barrel as of writing, with analysts predicting that it could hit US$160 (~RM668) by next week. The reason for the surge is because while oil from Russia – the world’s second largest oil producer – has not officially been banned, major financial sanctions against the country have made buyers wary of buying from Russian suppliers.