International airfares are expected to increase from Sept 15 with the reinstatement of a fare-regulating scheme suspended after last year's terror attacks in the United States, an official said Monday.

The Market Development Programme (MDP) will be reinstated with new conditions and a new price structure, a spokesman for the Malaysian Association of Tour and Travel Agents (Matta) told AFP.

"The details, like what percentage of a price increase will be imposed, I can't confirm yet," he told AFP after a meeting between the MDP working group and Matta.

"But all the airlines must adhere to the scheme, and there are strict penalties for violations," he said.

The MDP, which is a pact among 25 airlines operating in Malaysia, except Singapore Airlines, was introduced in April 1983 to standardise international airfare rates.

However, it was suspended after the industry was badly hit by the terror attacks in the US and carriers found the pact stifled their ability to stay competitive.

Airfares for international flights, particularly to Europe, subsequently dropped by as much as 50 percent.

"The lifting of the suspension had already been postponed three times, but this time, the working group has managed to work out a fair price structure and terms," said the official.

National carrier Malaysia Airlines heads the list of carriers that slashed prices by between 20 and 40 percent to destinations in Asia, Europe and the United States in an attempt to lift sales. AFP