Apart from the increase in the cost of fuel as a raw material, higher end-product costs have had negative effects on all airlines. In the first six months of this year, the price of Brent crude oil rose by 18 per cent when compared to the first six months of 2003. On the other hand, during April and May of this year, the price of Jet Fuel, rose by almost 60 per cent when compared to the same period in 2003.

As a result, Air Malta has had to adopt the advice of the International Airline Transport Association (IATA) to introduce a general increase of three per cent on all published fares to curtail this exceptional increase in operational costs. Many international airlines have adopted similar measures.

The measure comes into effect on 1 July 2004. For fares where this three per cent IATA measure does not apply, Air Malta has adopted a flat EURO 5 surcharge per sector flown. Tour operator package holiday programmes will not be increased before November 2004.

The final four months of the current financial year will see an increase in Air Malta’s fuel costs of Lm1.2 million over the budgeted amount, the airline added. At the present rate summer fuel costs will be up by Lm2.4 million. The IATA fuel surcharge will help Air Malta recover part of its increased fuel costs.

The current outlook on fuel prices over the twelve months to March 2005 points at an average cost which is 35 per cent higher than costs incurred in the financial year 2002/3.

Air Malta will continue to monitor the situation of fuel prices and the behaviour of the industry and will review the surcharges accordingly, the statement concluded