The Chinese government on Wednesday announced a cut of 20
percent in the fuel surcharge on domestic flights from later this
week, days after a reduction in the wholesale price of aviation
kerosene.
The National Development and Reform Commission (NDRC), the
national economic planning agency, said the 100-yuan (US$12.9)
surcharge per air passenger on domestic flights of or beyond 800 km
would be reduced to 80 yuan (US$10.3) from Sunday.
The agency also said the 60-yuan (US$7.7) surcharge per
passenger on flights of less than 800 km would be cut to 50 yuan
(US$6.4).
In a joint circular issued by NDRC and the General
Administration of Civil Aviation of China (CAAC), the surcharge for
children, police and soldiers injured on duty will drop from 30 to
20 yuan (US$2.6) for short flights, and from 50 to 40 yuan or
flights of or more than 800 kilometers.
"The government authorities at all levels should strengthen
their supervision over the air carriers to ensure the enforcement
of the surcharge cut and safeguard the interests of air
passengers," said an official with the NDRC price bureau, who
refused to give his name.
The government reduced the aviation kerosene wholesale price by
90 yuan (US$11.6) per ton on Jan. 14 as the international crude oil
price had been declining since last September.
Crude oil prices fell to a 19-month low on Tuesday. New York's
main oil futures contract, light sweet crude for delivery in
February, fell US$1.78 to close at US$51.21 a barrel.
To counteract the huge rise in costs of the aviation industry
brought about by high oil prices, the government twice raised the
fuel surcharge last year, almost tripling the surcharge it imposed
on Aug. 1, 2005.
CAAC head Yang Yuanyuan said earlier that the combined profits
of the nation's airlines surged to 4.73 billion yuan (US$608
million) from January to November 2006, 83 percent up from the same
period the previous year, a result mainly of falling oil prices and
the surcharge.
Yang estimated the airlines carried a total 160 million
passengers last year. Officials believed they gained at
least?7 billion yuan (US$900 million) from fuel surcharge in
the past two weeks.
The record low international crude price and earlier speculation
of a government injection of ten to 20 billion yuan (US$1.28
billion to 2.56 billion) boosted the stocks of China's three major
state-owned airlines in the Shanghai Stock Exchange.
China Southern Airlines Co. Ltd. and China National Aviation
Holding Company recorded a double-digit surge in their share prices
this month.
Liu Shaoyong, general manager of China Southern, announced
Tuesday that the company was set to report its first profit in five
years with with a revenue of 46.54 billion yuan (US$5.97
billion).
Liu declined to give the figures saying that they were still
being examined by government departments.
Analysts said the fuel surcharge cut would reduce the profit
margin of the already struggling industry, but the declining oil
price was likely to offset it.
(Xinhua News Agency January 18, 2007)