Rising jet fuel price drives domestic air fares up by MVR 500
Price of a jet fuel litre has increased by MVR 9.
By
Ahmed Naif
Domestic airlines have increased ticket prices as jet fuel price rose in Maldives owing to a wider global increase in energy prices.
Although airlines have not increased the basic ticket fare, customers now have to pay a higher price for domestic air tickets due to the increase in fuel surcharge.
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The price of a roundtrip ticket with the increase in fuel surcharge is MVR 500 now.
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Previously sold at MVR 1,200, return tickets are now available for MVR 1,750.
A senior official of a private airline operating in the Maldives told Dhauru that the price of jet fuel has increased by MVR 9 per litre in the past few months, and that a litre now costs MVR 22. Previously a litre of jet fuel was MVR 13. According to the official :
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Fuel being the biggest expense of an airline, there is no other way to adapt to fluctuating fuel prices without levying surcharges.
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Jet fuel is not subsidised and will severely affect prices.
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It is unlikely that the price of jet fuel will increase anymore, but if the Ukraine-Russia war intensifies, the prices will rise.
"We also understand that it will be difficult for the people when the price increases, but we can't operate at a loss when we have to manage a private airline. It is absolutely necessary to increase price," the official said.
Jennifer Latheef, the Deputy Managing Director of Island Aviation Services (IAS) which operates the national carrier Maldivian, also said that the price of jet fuel has increased significantly compared to December last year. This forced the fuel surcharge on tickets to be increased, she said.
"We have not changed the price of tickets. However, this increase is the impact of the change in fuel surcharge due to the high price of fuel. Jet fuel that was sold to us for USD 0.88 per litre is now being sold for USD 1.33," Jennifer said.
Changes in Maldivian’s ticket prices:
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Kaadedhdhoo - Male: Now sold for MVR 1,471; previously, it was sold for MVR 1,402.
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Male' - Addu : Now sold for MVR 1,582; peviously, it was sold for MVR 1,513.
Maldivian had in May increased the fuel surcharge, leading an MVR 180 increase on tickets. This is the second time the company's fuel surcharge has been changed this year.
Fuel prices will rise and fall over time. It’s not just about the general economy or exchange rate, but the fuel price can also be impacted by crude oil prices, distributor costs and even an unstable economic climate, such as the COVID-19 pandemic and Ukraine-Russia war.
Impact will be felt across tourism sector
The airline official also said that airlines are facing major challenges.
He explained that as the Ukraine-Russia war continues to affect European economies, fuel and power costs in several of the source markets for Maldives tourism will rise. As a result, tourist arrivals to the Maldives, especially from European countries, may decrease in the upcoming peak season. He also predicted that if this happens, it will negatively impact Maldivian airlines as well.
"Carrying tourists is a large part of airline operation here in the Maldives. However, tourist arrivals will decrease if their spending power decreases. Airlines will be severely affected by this," the official said.
Tourist arrivals to the Maldives decreased by 8.2% in August. A total of 131,863 tourists arrived in the Maldives last month.
