AirAsia removes fuel surcharges due to lower oil prices

AirAsia today announced it will not impose any fuel surcharge effective today. The move will also apply across its overseas operations in Indonesia, Thailand and the Philippines. – Reuters pic, January 26, 2015.Malaysian-based budget airline AirAsia Bhd, which lost a jet in Indonesia's Karimata Strait last month, said a drop in global oil prices has allowed it to remove fuel surcharges for passengers.

Oil prices have fallen around 60% since the middle of 2014 due to slowing demand and rising supplies from countries such as the United States, exacerbated by the Organization of the Petroleum Exporting Countries deciding not to cut output.

"We believe removing fuel surcharges and reducing travel costs will be a huge boost to the tourism industry," AirAsia said in a statement today.

The surcharge removal will also apply to regional affiliates in Thailand and Indonesia, as well as long-haul arm AirAsia X Bhd.

AirAsia removed the surcharge for all of its flights in 2008, but restored it in 2011 as fuel prices rose sharply, the airline said.

Shares of AirAsia closed 0.7% lower today, versus a 0.4% fall in the broader index.

On December 28, AirAsia flight QZ8501 crashed less than halfway into a two-hour flight from Indonesia's second-biggest city of Surabaya to Singapore, killing all 162 people on board. – Reuters

- TMI