Singapore Airlines to Raise Fares Again Due to Fuel Price Spike

SINGAPORE (AP) -- Singapore Airlines said Friday it will raise fares by as much as US$8 (euro6.10) - its second price hike in six months - but that it still expects to lose money because of a recent surge in jet fuel costs.

''The revised (fuel) surcharge will still not offset the increase in costs arising from recent record jet fuel prices,'' the airline - the world's second largest carrier by market capitalization - said in a statement.

Fares will go up beginning in May.

Jet fuel prices rose to more than US$70 (euro53.60) a barrel in April, up from about US$60 (euro46) a barrel in November 2004, when the airlines last raised its fuel surcharge.

At US$70 a barrel, the additional fuel cost to the airline will be more than US$300 million (euro230 million) for the 2005-2006 financial year, the airlines said.

Tickets for flights between Singapore and Kuala Lumpur will go up by US$10 (euro7.66) while long-haul flights will increase by US$30 (euro23).

A limited number of flights, including the Singapore to Bali route, will not suffer a higher fuel surcharge.

Crude prices have surged since the beginning of 2004 due to supply fears expressed by key producers - such as Saudi Arabia, Iraq, Nigeria, Venezuela and Russia - a weak dollar, and jitters over reduced excess capacity.

SilkAir, a Singapore Airlines Ltd. subsidiary that flies to destinations within Asia, said it will also increase its fares for most routes by US$8 because of jet fuel costs.

The airlines' ticket fare hikes follow similar announcements made by Air New Zealand Ltd., Korean Air Co., Qantas Airways Ltd. and Virgin Blue Holdings Ltd.