Rising fuel prices and widening losses for Chinese carriers are behind the decision to raise the fuel surcharge on domestic routes.
BEIJING- Chinese airlines increased last Wednesday their fuel surcharges on their domestic routes, due to rising aviation fuel costs. Fuel surcharges for routes shorter than 800 km rose from CNY 50 (US $ 7.94) to CNY 70, while surcharges for routes exceeding 800 km increased from CNY 100 to CNY 130.
The hike in costs came after airline companies raised fuel surcharges for their international routes on Saturday, the first increase since June. Rising global aviation fuel prices were the major reason behind the increases, analysts said. The country’s domestic jet fuel prices have risen by more than CNY 700 per ton since Saturday, data showed.
Soaring jet fuel prices have been wiping out profits at the nation’s airline companies, as fuel expenses account for more than 40 % of their total operating costs.
Air China, the country’s flagship airline, posted a 73.87-% drop in its first-half profit and its fuel costs gained 12.8 %. China Southern Airlines, the nation’s largest airline in terms of fleet size, reported a 83.7 % decline in its first-half profit after its fuel bill jumped 26.6 %. With high fuel costs and foreign exchange losses, the country’s airlines will see their profits down by 40 % from the previous year in 2012, analysts said.
Luc Citrinot a French national is a freelance journalist and consultant in tourism and air transport with over 20 years experience. Based in Paris and Bangkok, he works for various travel and air transport trade publications in Europe and Asia.
