Loke expects rise in airfares due to impact from Mideast war

 Jet fuel prices have skyrocketed since the start of the Middle East war last month, with airlines cutting flights and imposing fuel surcharges.

Airlines such as Cathay Pacific, AirAsia, Thai Airways, and Qantas have increased fares or introduced fuel surcharges – in some cases tripling them – to offset costs. (Bernama pic)

SHAH ALAM:

 Transport minister Loke Siew Fook has warned the public to prepare for higher flight ticket prices following a sharp increase in global jet fuel costs.

Jet fuel prices have surged since the start of the Middle East war late last month, largely due to disruptions in the Strait of Hormuz – a key route for over 20% of global oil – and attacks on regional refineries.

Jet fuel prices, which were around US$85–$90 per barrel before the war, have now soared to between US$150 and $200 per barrel.

Airlines such as Cathay Pacific, AirAsia, Thai Airways, and Qantas have increased fares or introduced fuel surcharges – in some cases tripling them – to offset costs.

Loke today said local airlines are also forced to impose fuel surcharges, and cut flights on certain routes where passenger loads are too low, to maintain operational efficiency.

“Yes, fares will increase… This is an unavoidable step because jet fuel costs are simply too high,” he said at an event here.

Loke also said the government would not impose price caps on airfares as the aviation sector operates in a free market system based on supply and demand.

“If we intervene and control prices to the point where airlines cannot cover costs, they may cancel flights,” he said.

“It will have a negative impact on the economy and the country’s tourism sector.” - FMT