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The Civil Aviation Department (CAD) today (July 25) gave approval for passenger fuel surcharges levied by nine airlines to be adjusted, on a short term basis, from August 1 to September 30.
The new maximum levels of fuel surcharges will be $231 for short-haul flights and $924 for long-haul flights. (These airlines and their newly approved fuel surcharge levels are listed in the Annex.)
It is an international practice for airlines to levy passenger fuel surcharges. The current average passenger fuel surcharges between major international destinations are at the levels of about $458 per passenger for short-haul flights and about $1,458 per passenger for long-haul flights.
A CAD spokesman said, "When compared with the average amounts of surcharges at international level, the surcharges on the local routes remain at a lower level (short-haul and long-haul surcharges at about 50.4% and 63.4% of the international levels respectively)."
Fuel surcharges are a type of aviation tariff which requires the approval of the relevant aeronautical authorities before they can be levied. When approving applications for levying fuel surcharges, CAD will take into account changes in the prices of aviation fuel, the justifications provided by the airline operators, and other relevant factors such as the charges levied by the other airlines.
"Despite the reduction in oil prices in the last several days, the latest monthly average of aviation fuel prices is still higher than that when the passenger fuel surcharges were last reviewed. The significant increase in fuel prices has had a severe impact on the operating costs of airlines. Although airlines have taken some cost-cutting actions to counter the high fuel costs, they are still unable to off-set the additional cost due to the high fuel prices. Some airlines have to redeploy their capacity or even reduce services."
"The purpose of the passenger fuel surcharges is to help airlines tide over the short-term fluctuations in fuel costs. When approving fuel surcharges, CAD would ensure that the revenue generated will not exceed the additional costs borne by the airline operators due to increased oil prices during the corresponding period," the CAD spokesman said.
"It is estimated that most airlines recover about 40% to 70% of their additional fuel costs through the fuel surcharges. They have to make up for the rest of the increased costs through other means such as cost management and yield improvement."
"Passenger fuel surcharges are reviewed and adjusted regularly by CAD, following the established mechanism. The levels will be adjusted downwards should the aviation fuel prices decrease in the future."
The last review was done at the end of May when the maximum surcharge levels approved by CAD were $171 for short-haul flights and $710 for long-haul flights.
Ends/Friday, July 25, 2008
Issued at HKT 17:45
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