Fuel surcharges imposed on domestic flights has been extended,
according to a circular issued recently by the General
Administration of Civil Aviation of China (CAAC), the industry
watchdog.
The original deadline was December 31, 2005.
Tickets for flights in 2006 issued before this new announcement
was made are exempt.
To address the issue of rising jet fuel prices, domestic
carriers were allowed to introduce fuel surcharges on internal
flights beginning August 1 until the end of the year. This was
announced in a document jointly released by the CAAC and the
National Development and Reform Commission (NDRC) at the end of July.
An additional 20 yuan (US$2.46) will be charged to ticket prices
for distances less than 800 kilometers, or 40 yuan (US$4.93) for
distances 800 kilometers or more.
Sources with the CAAC said the CAAC and the NDRC will continue
to work together on the surcharge policy.
A CAAC insider said that it was the newly established China
Aviation Transportation Association that made the application to
extend the surcharge policy.
The association was set up on September 26. Its members include
Air China,
China Eastern, and China
Southern Airlines.
Wei Zhenzhong, secretary-general of the association, confirmed
that it had made the application.
However, industry analysts believe that the surcharge extension
will not significantly change the balance sheets of domestic
airlines.
Li Li, an analyst from Beijing Aviation Securities Company, said
the surcharge does little to reduce operation costs mainly because
of discounted airfares that airlines offer.
Li said cut-throat competition on domestic routes forces
carriers to offer heavily discounted tickets to lure customers,
especially during off-peak periods. Discounts offered can be as
much as 70 percent of CAAC list prices.
(China.org.cn by Wang Zhiyong November 26, 2005)?
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