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AVIATION
BOONSONG KOSITCHOTETHANA
Thai 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.
The increases, effective on June 25, are much more hefty than the previous adjustment on April 28 _ 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.
THAI 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.
The 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.
The 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%.
Fuel 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 another (see chart).
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