Garuda, other Asian airlines hike airfares

Garuda, other Asian airlines hike airfares

Associated Press, Jakarta/Singapore/Hong Kong

Several major airlines in Asia have decided to raise airfares following climbing crude oil prices.

Indonesia's national flag carrier Garuda on Tuesday hiked airfares to Australia and New Zealand by A$15 (US$11) and NZ$12 ($7.50) respectively.

"We had to it because fuel costs are 25-30 percent of our operation costs," said Garuda's spokesman Pudjobroto, adding the two routes are the company's most profitable.

Other international and domestic flights may also go up if prices remain high, he said.

Indonesia increased aviation fuel prices by 6 percent on Tuesday.

Garuda is the country's largest airline with 54 jets. The state-owned carrier serves 21 domestic and 22 international destinations.

Meanwhile, Singapore Aiarlines announced on Tuesday that it will impose a surcharge on all its flights worldwide from June 7 in response to rising fuel costs.

"This move is necessary in light of rising fuel prices and in line with action being taken by other major carriers to help defray part of the higher fuel cost," the airline said in a statement in Singapore.

The move also affects its sister airline SilkAir. In May, Singapore Airlines began imposing a surcharge on flights originating in New Zealand, Australia, Britain and France but now said that fee would be superseded by the flat $5 fee.

Fuel accounts for 20 percent of the airline's operating costs and it will consume over 1.4 billion gallons of fuel, or 27.3 million barrels, in the current financial year ending March 31, 2005, Dow Jones Newswires reported.

Regional rivals Qantas, Cathay Pacific and Air New Zealand have already passed on their rising fuel costs to the consumer.

Oil prices again jumped Tuesday after a terror attack in Saudi Arabia targeting Western oil workers left 22 people dead and just prior to an OPEC oil ministers meeting in Beirut, Lebanon where they are expected to debate a possible production increase.

Singapore Airlines, the world's second largest airline by market value, is majority owned by Temasek Holdings, the government's investment arm.

Separately, Cathay Pacific Airways, Dragonair and nine other airlines have been given permission to levy surcharges on passengers traveling on flights into and out of Hong Kong to cover surging fuel prices, a government spokeswoman said Tuesday.

Civil Aviation Department spokeswoman Sandra Lai said in Hong Kong that the government has permitted Cathay to charge passengers $5 each way for flights within Asia and $14 for flights to other destinations.

Dragonair and three mainland airlines - China Eastern, China Southern and Air China - can collect $5.40 per flight from each passenger, regardless of its length.

The six other airlines that won approval Monday were Australian Airlines, Qantas Airways, Virgin Atlantic Airways, Emirates Airlines, Air India and Gulf Air. Their surcharges will range from $4 to $10.70.

Lai said the surcharges will be charged immediately and applied until the end of August.

The department had already permitted South African Airways and Air Canada to levy surcharges.

The department said it's considering applications from six other international airlines, but didn't identify them.

Jet fuel prices have risen more than 30 percent since the beginning of 2004 to their highest levels in more than a decade.