Airfares may stay flat despite removal of fuel surcharges

Singapore

DESPITE fuel surcharges being lifted by airlines, airfares are likely to remain flat or decline just marginally as base fares are inflated to protect margins, a Maybank Kim Eng report said.

With jet fuel hovering under US$60 per barrel - roughly half what it was a year ago - nine airlines removed fuel surcharges in January, including Qantas, AirAsia and Firefly. Other airlines which plan to or have already done so include Japan Airlines, Cathay Pacific, Qatar Airways and Virgin Australia. Meanwhile, Chinese airlines will do away with fuel surcharges for domestic flights this week, the Civil Aviation Administration of China has said.