Domestic airlines are increasing fuel surcharges by as much as 50 percent from today to offset rising fuel costs.

Each passenger will pay 80 yuan (US$11.76) on domestic routes shorter than 800 kilometers, up from the current 60 yuan. For long-haul flights, the surcharge will rise to 150 yuan from 100 yuan, the Civil Aviation Administration of China and the National Development and Reform Commission said yesterday.

Babies are exempt. Children, disabled servicemen and police officers injured on duty will receive a 50 percent discount and people who have already bought tickets will not have to pay the extra charge.

The move is a result of the aviation fuel price increases introduced on June 20 as part of China's efforts to reform energy prices and improve the allocation of resources.

The retail price of jet fuel will be about 8,000 yuan a ton after the country raised the price by 1,500 yuan a ton.

"The surcharge increase will offset about 35 percent of the higher fuel costs," said Li Jun, an analyst with Everbright Securities.

"We expect that the climbing jet fuel prices will generate more than 20 billion yuan costs for domestic airlines this year and the airlines' revenue will decrease by more than 2 billion yuan from a year earlier," Li said.

Shanghai CYTS Tours was confident the increases would not have a major effect on the market. "I don't think people will give up a tour only because they will have to pay some more fuel surcharge," said Liu Xiaojun, an official with the company.

(Shanghai Daily July 1, 2008)