Air China, Juneyao to Bring Back Fuel Surcharges as Cost Rises
Liao Shumin
DATE:  Nov 04 2021
/ SOURCE:  Yicai
Air China, Juneyao to Bring Back Fuel Surcharges as Cost Rises Air China, Juneyao to Bring Back Fuel Surcharges as Cost Rises

(Yicai Global) Nov. 4 -- Some Chinese airlines, including Air China, Lucky Air, and Juneyao Air, will restart collecting domestic flight fuel surcharges from tomorrow for the first time since January 2019 due to soaring jet fuel prices.

Each passenger will be charged CNY10 (USD1.6) on a journey of no more than 800 kilometers and double that if the trip is longer, according to new policies announced by Donghai Airlines, Ruili Airlines, and 9 Air. Other aviation companies, such as China Southern Airlines, China Eastern Airlines, and Hainan Airlines, may follow suit.

But the fees may be illegal. Based on a policy the National Development and Reform Commission and the Civil Aviation Administration of China released in 2015, Chinese airlines can charge fuel surcharges if the domestic fuel prices exceed CNY5,000 per ton.

For now, many travelers are likely to pay the higher tariff. The distance between Beijing and Shanghai is nearly 1,200 km so the new policy means flight buyers need to pay an additional CNY20 for their tickets.

Jet fuel prices have kept rising since May 2020. Prices climbed to CNY4,655 (USD728) per ton in October, about the same level as in April 2018, with expected further increases this month.

Jet fuel accounts for around 30 percent of airlines' total costs, Securities Times reported, citing industry insiders. This year's rising oil prices are weighing on airlines, they added.

In the first half, the fuel costs of Air China, China Eastern Airlines, and China Southern Airlines surged by almost 50 percent, based on the same report. China's flag carrier Air China said in its semi-annual earnings report that a 5-percent price change equals CNY496 million (USD77.5 million).

Editor: Emmi Laine, Xiao Yi

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Keywords:   Airlines,Fuel Surcharge