Merpati Airlines may raise fuel surcharge on rupiah, oil prices
Merpati Airlines may raise fuel surcharge on rupiah, oil prices
Kyunghee Park, Bloomberg/Singapore
PT Merpati Nusantara Airlines, a state-owned Indonesian carrier,
may raise fuel surcharges should the rupiah extend its decline
and oil prices rise from a record.
The rupiah fell to a three-and-a-half year low on Thursday
after an increase in oil prices added to concern the government
of Southeast Asia's largest economy will not be able to stem the
currency's decline.
"If it's sustained for a month, maybe we will recalculate the
price for fuel surcharges," Zifky Priatelna, an official at
Merpati's operational control, said by telephone. "Mostly our
costs are still in U.S. dollars."
The rupiah's decline has boosted costs for Indonesian airlines
including Merpati and PT Garuda Indonesia because they pay for
fuel in dollars. The price of jet fuel traded in Singapore has
surged 60 percent this year, closing at US$76.70 a barrel
yesterday, according to data compiled by Bloomberg. Fuel accounts
for about 48 percent of Merpati's total costs, Priatelna said.
The existing fuel surcharge makes up between 9 percent and 15
percent of the price of a Merpati ticket, Priatelna said.
President Susilo Bambang Yudhoyono on Wednesday said he will
work with the central bank to curb the rupiah's slide after the
currency had its biggest drop since May 10, 2004. Rising oil
prices increase demand for dollars to import fuel and make it
more expensive for the government to subsidize energy prices for
the nation's 40 million people who are without work or don't have
a steady job.
Indonesia's currency traded at 10,341 per dollar at 3:33 p.m.
in Jakarta.
Merpati is also cutting costs in other parts of its
operations, including catering, in an attempt to cover rising
fuel costs, Priatelna said.
Indonesia's government is studying a plan to combine Garuda,
which is seeking a government bailout, with Merpati and PT Pelita
Air Service to help the companies become profitable, State
Enterprise Minister Sugiharto said on Aug. 16.
The government may make a decision by as early as February, he
said. Pelita is controlled by Indonesia's state oil company PT
Pertamina.