Air Malta will increase its fuel surcharge starting from 1 July due to the ever-increasing price of crude oil.

As of 1 July, the fuel surcharge on all Air Malta scheduled routes will increase by e5 per sector with the exception of flights to Catania, Palermo, Reggio and Tunis which will see an increase of e2. Flights to Rome, Milan, Bologna, Venice, Naples and Tripoli will increase the fuel surcharge of e3. Air Malta’s fuel surcharge now stands between e11 per sector for the shortest routes to e25 per sector for its longer routes.

In a statement, it said that the airline industry is being hit hard by the price of jet fuel. According to major airline industry organisations including the International Air Transport Association (IATA), these sharp increases have become the major threat to the aviation industry.

Air Malta, over the past years, has applied fuel surcharges in an attempt to realign their revenues and operating costs. The airline said that, in 2007, its fuel bill almost doubled over the past three years – an increase of e30 million in spite of fuel-hedging agreements which the airline had successfully managed to conclude in the past. With the new oil prices, the airline will incur a further e32 million.

At a meeting in Istanbul this week, IATA director general Giovanni Bisignani warned that if the price of oil falls and stays at $107 per barrel, airlines would lose e1.5 billion while if it maintains a level of $135 per barrel, which it hit in May, losses world-wide would be of e3.6 billion.

“Air Malta’s current fuel surcharge had been revised in November 2007 when crude oil prices were around $80 per barrel and this new additional rate will hardly cover 15 per cent of the increase in annual fuel costs expected for this year. The airline is committed to meet the gap through further cost reductions and efficiencies while at the same time seek further opportunities for revenue growth,” it said.

The airline maintains that it is being vigilant and is watching the situation very closely on a day-by-day basis in order to make the necessary adjustments if and when justified. Further escalations can continue to hamper the considerable efforts which have been made to turnaround the company, the airline added.