Increase in airline fuel surcharges starts today


PASSENGERS on domestic routes will have to pay higher fuel surcharges starting today as airlines seek to offset the rising cost of jet fuel.

Fuel surcharges on routes longer than 800 kilometers rose to 150 yuan (US$23.85) from 140 yuan, and those on shorter routes climbed to 80 yuan from 70 yuan, domestic airlines announced.

The new surcharge matches the highest they've been since China began allowing airlines to impose them in 2000. In July 2008, fuel surcharges reached the same levels.

The current increase was triggered by the price of domestic jet fuel that rose by 330 yuan per ton to 8,054 yuan this month in line with the increase of the benchmark price of Singapore jet kerosene, according to the National Development and Reform Commission, China's top economic planner.

"Airlines raised fuel surcharges because of a higher procurement cost, which is calculated at the weighted average of ex-factory price jet fuel and the imported price of fuel," said Li Lei, an analyst at China Securities Co.

"Generally, airlines absorb 20 percent of the increased cost and passengers pay the remaining 80 percent," the analyst said.



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