AirAsia scraps fuel surcharges as oil price plummets

CORRECTS NUMBERS OF THE PASSENGERS - In this May 9, 2014 photo, an AirAsia A320-200 plane takes off from Kuala Lumpur International Airport 2 in Sepang, Malaysia. An AirAsia plane with 162 people on board went missing on Sunday, Dec. 28, 2014 while flying over the Java Sea after taking off from Surabaya, Indonesia for Singapore. The plane in this photo is the same model but not the one which went missing in Indonesia Sunday. (AP Photo/Joshua Paul)

Southeast Asia’s biggest budget carrier AirAsia is scrapping fuel surcharges on tickets following the decline in global oil prices.

AirAsia said the move also applies to flights under its long-haul arm AirAsia X.

Oil prices are now below $50 per barrel after 6 months of declines, pushing down jet fuel prices.

Chief Executive Tony Fernandes said the move will help reduce travel costs, stimulate demand and boost tourism in the region.

Airlines impose the surcharges to pass on higher fuel costs to travellers when fuel prices are rising.

Rivals Virgin Australia and Cebu Pacific in the Philippines abolished fuel surcharges earlier this month.

AirAsia has dominated cheap travel in Southeast Asia for years but faces rising competition from the proliferation of discounts airlines in Asia.