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| High Season for Chinese Airlines and Fares Rise |
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From today air travelers in China will pay up to 20 yuan (US$2.5) in surcharges as airlines try to cope with rising fuel costs. Chinese airlines will welcome the high season despite the fuel surcharge which will remain in place until October. The six month period includes two of China's 'golden week' holidays-- the Labor Day and National Day vacations. Passengers will be charged an extra 10 yuan (US$1.3) for flights of less than 800 kilometers, and 20 yuan (US$2.5) for those over that distance, according to the new regulation jointly issued by the National Development and Reform Commission and the General Administration of Civil Aviation of China. China consumes about eight million tons of aviation fuel every year. When the price rises by 300 yuan (US$37) per ton the total costs increase by 2.4 billion yuan (US$300 million). The price rise is designed to reduce the impact of the high fuel costs. Supply generally exceeds demand in China's passenger transportation market and therefore many airlines have to compete simply on ticket price. Faced with the high fuel costs airlines adopted a strategy of saving fuel. The China Southern Airlines has set a goal to save between 200 to 300 million yuan (US$25-US$37 million) in fuel costs in an effort to cover the price rise. The China Eastern Airlines are to introduce 25 new aircraft this year which, with modern technology, will have lower than normal consumption. To cut down on weight some airlines have reduced the number of magazines on board and the weight of cabin service trolleys. Last year, Air China, recorded a profit of 2.92 billion yuan (US$364 million) which was due in part to restrictions being placed on flight altitudes and aircraft speed to save fuel, said Li Jiaxiang, president of Air China. Tourism industry experts said the increase in fuel prices didn't get an immediate reaction from tourists and it was sensible for airlines to introduce fuel saving measures to control costs. High fuel prices were a problem for Chinese airlines and fuel efficiency provided savings, said Tian Baohua, president of the Civil Aviation Management Institute of China. (Xinhua News Agency April 10, 2006) |
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