LCQ4: Monitoring mechanism for airline fuel surcharges
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Question:
Recent ongoing tensions in the Middle East have led to a continuous rise in aviation fuel prices, prompting many airlines in Hong Kong to successively increase their passenger fuel surcharges. However, there are views that the increases in passenger fuel surcharges vary among airlines, with some differences being very significant (for example, some airlines have increased their surcharges by approximately 30 per cent, while some have increased them by more than one-fold). This situation has caused confusion among the public, and made it difficult for travel agents to provide consumers with a reasonable explanation, which may in turn adversely affect the industry's reputation and impair the status of Hong Kong as an international aviation hub. In this connection, will the Government inform this Council:
(1) given that the Government liberalised passenger fuel surcharge in 2018, allowing airlines to determine the surcharges they levy at their own discretion, whether the Government will consider re-regulating passenger fuel surcharge, for example by setting a cap on the rate of increase, to ensure that increases are reasonable and transparent;
(2) whether the Government will consider establishing a mechanism to ensure that, when international oil prices fall, Hong Kong airlines can reduce their passenger fuel surcharges accordingly within a specified time frame; if so, of the details; if not, the reasons for that; and
(3) as it has been reported that many airlines have recently announced adjustments to their passenger fuel surcharges at very short notice, with an airline announcing its surcharge adjustments to take effect in two days' time and subsequently raising them again within a week, and there are views that this leaves consumers and the tourism industry insufficient time to prepare, causing considerable inconvenience, whether the Government, in this connection, will consider requiring airlines to provide a reasonable notice period when adjusting their passenger fuel surcharges; if so, of the details; if not, the reasons for that?
Reply:
President,
With ongoing tensions in the Middle East, airlines worldwide are being impacted by elevated aviation fuel prices. This is placing significant pressure on the costs and cash flow of local airlines, which have to respond to these challenges by increasing fuel surcharges or adjusting flight schedules. At the same time, as an international aviation hub, maintaining the competitiveness of Hong Kong International Airport (HKIA) is of paramount importance, and local airlines have to continue to provide stable and reliable services to passengers. The Government is committed to working closely with local airlines to jointly address the current difficulties and ensure the quality of air services, with a view to minimising the impact on passengers and the competitiveness of HKIA.
My reply to the question raised by the Hon Kong is as follows:
(1) and (2) The Government has been adopting a policy of liberalising air tariffs in a progressive manner. Fuel surcharges allow airlines to partially recover the increase in operating costs due to the fluctuation of fuel prices. There is a global trend of deregulating fuel surcharges. The liberalisation of fuel surcharges aims to allow market forces to regulate the level of fuel surcharges on their own, in the same way that the market determines other components of the prices of air services. Airlines will have greater incentives to improve the overall efficiency and quality of their services as a result of market competition, and market forces will cause prices of air services, including fuel surcharges, to be set at competitive levels.
The Government has liberalised passenger fuel surcharge (PFS) with effect from November 2018, and cargo fuel surcharge with effect from January 1, 2025. After the liberalisation of fuel surcharges, airlines may decide at their discretion whether to impose fuel surcharges and at what level for flights originating from Hong Kong. With regard to PFS, airlines must display the final price of air tickets and provide a breakdown of the final price to show all "must pay" elements of the ticket fare in each quotation/transaction, including PFS (if applicable), at their direct sales outlets.
Major aviation fuel price index in the Asia-Pacific region increased by more than double in the past few weeks. Aviation fuel can account for more than 30 per cent of an airline's operating costs. It is important for airlines to appropriately raise ticket fares or increase fuel surcharges to continue providing reliable air services, which is crucial for maintaining Hong Kong's status as an international aviation hub. Even in jurisdictions where fuel surcharges remain regulated, fuel surcharges have similarly been adjusted upwards in response to elevated aviation fuel prices.
(3) The Transport and Logistics Bureau has maintained close communication with local airlines to understand the industry's situation, as well as to emphasise the importance of maintaining the competitiveness of HKIA and remind local airlines of their critical role and social responsibilities in this regard. The Government will continue to closely monitor the service provision of local airlines and urge them to provide a reasonable notice period whenever possible when adjusting fuel surcharges, so as to minimise inconvenience to passengers and the tourism industry. We will also maintain close communication with the tourism industry and further enhance information transparency through the Travel Industry Council of Hong Kong's online platform (List of Passenger Fuel Surcharges), enabling the public to better understand the details of fuel surcharge adjustments while fostering market competition.
Ends/Wednesday, April 22, 2026
Issued at HKT 11:45
Issued at HKT 11:45
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