THAI Announces Substantial Increases In Fuel Surcharges

Airways International (THAI) has bowed to the inevitable again and is passing
on higher costs to travellers in a new round of fuel-surcharge increases.
increases, effective on June 25, are much more hefty than the previous
adjustment on April 28, 2008 as much as 140% on certain international routes as
jet fuel prices have since skyrocketed.
    Like other
airlines across the region, the national carrier is struggling to cope with
high jet fuel prices, which have doubled in the past 12 months, through
surcharges, hedging and other cost cuts.
    Jet fuel
prices on Tuesday were quoted at US$166.26 a barrel on Singapore‘s
spot market, down by $5.91 from the previous day.
executives said the new round of fuel-surcharge increases, however, did not
cover the actual incremental fuel costs as the airline was mindful of the
impacts on passengers.
calculations of the fuel surcharges were based largely on jet fuel prices of
$153 a barrel.
    Fuel is the
largest expense of THAI, accounting for 34% of its total operating cost,
compared to 15-18% for wages.
increases in fuel surcharges on THAI’s international routes are much more
dramatic than those on the domestic routes, mostly in the range of 60-70% with
a peak of 140%.
surcharges on all but one domestic route are to rise by 100 baht to 850 baht per
leg. But the rate on Chiang Mai-Mae Hong Son doubles to 600 baht per sector. The
fuel surcharges on international routes vary from one geographical area to


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