Malaysia AirlinesмебелиSUBANG, Jan 13 – Malaysia Airlines will remove its domestic fuel surcharge for travel in Malaysia, effective Jan 14.

The national flag carrier made the decision after taking into account the decline in fuel prices, competitive pressures and the need to boost air travel during this period of economic slowdown.

Managing Director/Chief Executive Officer, Datuk Seri Idris Jala said, “We have always offered competitive fares that are benchmarked against our competitors on a route by route basis. Today’s move is in line with the competition, ensuring even more competitive pricing.

“Our stand is the total amount that the customer pays must be competitive, whether it’s the fares alone or fares in combination with the fuel surcharge. It’s the total sum of the parts that matters.”

The removal of the fuel surcharge will see more competitive prices for MH Value Fares which offers four fare options for economy class travel – MHlow, MHbasic, MHsmart and MHflex.

“There will be more value travelling with Malaysia Airlines as on top of the removal of the fuel surcharge, the fare options offer discounts off the fares – MHlow up to 70 per cent discount, MHbasic, up to 50 per cent; and MHsmart, up to 20 per cent,” he said.

For international travel, Malaysia Airlines have earlier reduced fuel surcharge for travel from Malaysia to Korea, Japan, Paris, Hong Kong and Singapore, and from other points of sales to various destinations.

From Malaysia, the reductions are RM126 (US$36) to Korea, RM105 (US$30) to Japan, RM80.50 (US$23) to Paris, RM38.50 (US$11) to Hong Kong and RM28 (US$8) to Singapore.

“We are always reviewing the surcharge as we continue to benchmark the international fuel surcharge against our competitors. In markets where other carriers are the major players, we will follow if they drop the surcharge. In markets where we lead, we will evaluate the customer demand vs supply,” Jala added.

Despite recent falls in oil price, Malaysia Airlines’ fuel costs are still higher compared to when surcharge was first introduced in 2004.

“Fuel remains our biggest cost and our fuel bill for FY2008 will be higher than FY2007 as the fuel surcharge only covers about 30 per cent of the fuel cost,” he said.

Airlines use jet fuel which is higher priced compared to crude oil. On Jan 12, 2009, a barrel of jet fuel cost US$60.60 compared to US$40.83 per barrel (WTI) for crude.

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