By ONE Liners Agency
August 02, 2011
CHINA NEWS - Several Chinese airlines have raised domestic flights' fuel surcharge to record high despite the oil prices in International market has dropped, reports CBN on Tuesday.
The surcharge comes after Civil Aviation Administration of China informed airlines the factory price of domestic oil has been fixed at 7,725 yuan per ton from August 1, and the purchase cost for the airlines was adjusted to 7,785 yuan per ton.
However, the fuel surcharges will remain at 80 yuan for shorter routes less than or equal to 800 kilometers. Routes more than 800 kilometers will have to pay more. It has been increased from 140 yuan to 150 yuan. The airlines that have announced the increase in domestic fuel surcharge include Air China, China Southern Airlines, and China Eastern Airlines.
According to a senior official of an airline company, the increased surcharge will not be covering the rise in fuel coast completely, and the profit margin of the airlines need to be decided by the ticket prices and domestic market demand.
Analyst Wu Yunying from Changjiang Securities said the high-speed railways are far behind expectation in taking number of passengers, and more to this the aviation peak season is approaching. He adds that the airlines may increase the ticket prices as well as the amount of passengers.
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