Dropping extra charges within the airline industry isn’t a great news to embrace in the face of declining oil prices and other unforeseen disasters.
The decline in oil prices has adversely affected the country in a number of ways including the revision of Malaysia’s 2015 Budget and the weakening Ringgit. You can however benefit from this if you’ve already caught the travel bug.
Fuel surcharges has been abolished by AirAsia from January 26, 2015 across all its airlines. With this new strategy gradually gaining grounds in the airline industry, more airlines such as FireFly and Malindo Air have bought into the idea with some yet to implement it.
Few years back many airlines surcharged their fares due to the hype in crude oil prices which was trading at $130.00. The reduction in oil prices is currently forcing the airline industries to remove those excessive extra charges in order for them to still remain in business.
Though AirAsia abandoned and removed all surcharges from its fares in all its airlines in 2008, it however, reintroduced it when oil prices sky rocketed in 2011. Many airlines introduced it into their fares in the era of the 2000’s when oil prices went up in order to gain more profit.
“Fuel is the largest category of operating expense for the industry, representing around 30% to 33% of industry operating expenses,” said Mona Aubin of the International Air Transport Association, the trade association for the world’s airlines in an article published by CBC News.
The reduction is very timely and has come at a time where the market confidence and the overall air travel in the region for the company has gone low. With the reduction in fuel prices and removal of all extra charges on flight fares, customers will be able to access flights at relatively very low fares.