Chinese airlines resume fuel surcharge

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A number of Chinese airlines announced on Monday resumption of fuel surcharge on domestic routes from June 5, after a three-year hiatus, according to a report by National Business Daily.

The carriers - Kunming Airlines, Air China, Spring Airlines, China United Airlines, LJ Air, Shenzhen Airlines, West Air, OK Air and Juneyao Air - will charge 10 yuan (US$1.6) on every adult ticket.

In response to the question whether the airlines discussed the issue together in advance, Zhang Wuan, a spokesman for Spring Airlines, said there was no discussion but companies do have a certain collective sensitivity to the market, according to the report.

An airline company insider said fuel surcharge on domestic routes was expected due to the rise in jet fuel cost, the report said.

Qi Qi, a senior commentator in the field of civil aviation, said the resumption of fuel surcharge on domestic routes is mainly due to high international oil prices and airlines' increasing costs, according to the report.

As more than a thousand domestic flight routes have realized market pricing and almost all airlines have raised the benchmark price for full price of the economy class, it is unclear whether the airlines' unilateral declaration of resuming fuel surcharge conforms to the prescribed procedures and it is worth thinking whether it is necessary for them to publish their methods of initiation and termination, Qi added.

However, civil aviation expert Lin Zhijie said that while airlines levy fuel surcharges for covering the costs driven by oil prices, market pricing is driven by supply and demand, and the relationship between them is not simply a kind of substitution, according to the report.

On Feb 5, 2015, domestic airlines had stopped collecting fuel surcharges because of the reduction of comprehensive procurement costs of aviation oil.

The base price of aviation kerosene for civil airlines to collect passenger fuel surcharge of domestic routes has been raised to 5,000 yuan per metric ton from 4,140 per ton since April 1, 2015, according to a notice issued by the National Development and Reform Commission and Civil Aviation Administration of China in March 2015, the report said.

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