[photopress:air_china_southern_2.jpg,full,alignright]China Southern Airlines, the nation’s largest carrier by fleet size, has applied for an increase in fuel surcharge to offset expected losses resulting from the recent nationwide fuel price hike.
China Southern’s general manager Liu Shaoyong told the Beijing Times that the airlines asked to raise the surcharge ‘by a margin reflecting the current fuel price level.’ He did not give any figures.
Analysts said the fuel price increase is a problem as it raises their largest cost component at a time when domestic traffic sees some weakening. They say the carriers would need around a RMB70 increase in surcharge to offset the hike in domestic fuel prices.
When the government raised the price of jet fuel by 25% it added about RMB15 billion a year to the domestic carriers’ operating costs.
[photopress:air_china_southern_1_2.jpg,full,alignleft]A China Southern spokesperson confirmed the airline has applied to the National Development and Reform Commission for a fuel surcharge increase but has yet to obtain approval.
An Air China spokesperson, meantime, said ‘it is very likely that if the authority allows upward adjustment of fuel surcharge [to CSA], it’s a green light for peers as well.’ Passengers currently pay a fuel surcharge of RMB60 on flights of up to 800 kilometers and RMB100 on flights beyond that.
Source: The Standard