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MASkargo to Up Fuel Surcharge From July 15

Posted on: Wednesday, 6 July 2005, 00:00 CDT

MALAYSIA Airlines (MAS) said it will raise its fuel surcharge for uplift

of cargo effective July 15 2005 to offset rising oil prices.

This will be the third increase by its cargo division, Malaysia

Airlines Cargo Sdn Bhd (MASkargo), this year.

The increase, said MASkargo, is unavoidable as its fuel price index has

continuously exceeded 305.

Beginning July 15, cargo from Malaysia to the US (Iata Area 1), and

Europe and parts of Africa (Iata Area 2) will increase by 12.5 per cent

to RM1.71 per kg, from RM1.52 per kg.

However, the surcharge for cargo from Malaysia to other parts of the

world will remain unchanged, MASkargo said in its circular to customers

dated July 1.

The fuel index is based upon an average of the four most important jet

fuel spot markets: Rotterdam, Far East Singapore, US Gulf and North-West

Europe. The index is based on an average price of June 1996 of US$0.535

(US$1 = RM3.80) per gallon.

Adjustments to the fuel surcharge occur when the index equals, exceeds,

or falls below a specified fuel threshold for two consecutive weeks.

MAS senior general manager (cargo) Datuk Ong Jyh Jong had in an earlier

interview with Business Times said the company would not increase its

fuel surcharge "because that will hurt a lot of people in the market".

Fuel bill now accounts for 21 per cent of the airline's operating

expenses, from 14 per cent in the last fiscal year ended March 31 2005.

However, a MASkargo official said a meeting of the cargo division's

senior management last Thursday took the decision to increase the fuel

surcharge.

MASkargo had first raised the surcharge for cargo from Malaysia to Iata

Areas 1 and 2 from RM1.14 per kg to RM1.33 per kg in March this year. A

month later, it raised the surcharge to RM1.52 per kg.

MASkargo thus joins other carriers, such as Lufthansa, Air France- KLM,

Austrian Airlines and American Airlines which have already announced an

increase to their fuel surcharges.

Source: Business Times; Kuala Lumpur

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