Transport Minister warns price controls could disrupt flights as jet fuel costs surge.
SETIA ALAM: The government cannot intervene in airline pricing despite rising airfares, as the aviation industry operates on a free market model, Transport Minister Anthony Loke said.
He said any attempt to control ticket prices could backfire and disrupt flight availability.
“If we control the price until it cannot cover the cost, airlines will stop flying and when supply is less, prices will rise higher,” he told reporters today during the mock-cheque presentation ceremony to SMJK Chan Wa, here.
Loke stressed that while there are currently no disruptions to aviation services, airlines are under significant pressure from rising jet fuel costs.
“Well, so far there’s no disruption yet, but all logistics and transportation sectors are facing very tough challenges right now,” he said.
He said airlines are experiencing a sharp increase in fuel costs, forcing them to reassess operations.
“Airlines are facing a big jump in terms of their jet fuel cost so they have to manage their costs very well to ensure that they do not over-bleed,” he said.
Loke added that as a result, some carriers have informed the government that they may rationalise flights, particularly on routes with low passenger demand.
“If the load factor is too low, definitely they have to cut down some flights to ensure that flights are more efficient,” he said, describing the move as temporary.
Loke added that fuel surcharges will be imposed on new ticket purchases to offset rising costs.
“This fuel surcharge is an addition to new tickets… if you bought earlier, the price remains the same.
Airlines cannot charge you again,” he said.
He also said airlines had absorbed higher costs during the recent festive season, honouring tickets purchased months in advance.
“Even though costs increased considerably, they still carried out all flights and the airline has to bear the risk,” he said.
However, he said such cost absorption is not sustainable moving forward.
“If you buy the ticket today, of course there will be a fuel surcharge, this cannot be avoided,” he said.
Loke also highlighted that maintaining flight connectivity is crucial to the broader economy, especially tourism and related sectors.
“If aviation does not fly, tourists cannot enter while hotels and the economy will be affected,” he said.
