China cuts fuel surcharges on domestic flights
19/12/2008 16:38
China will reduce fuel surcharges on domestic flights by up to 75 percent,
starting Dec. 25 of this year, the top economic planning agency, the National
Development and Reform Commission (NDRC) said today.
For flights more than
800 kilometers, the surcharge will decline to 40 yuan (US$5.6) from 150 yuan per
ticket. Fees on routes shorter than 800 km will fall from 80 yuan per ticket to
20 yuan.
The move will reduce travel costs and boost demand, said a Sinolink
Securities analyst.
However, lower passenger surcharges reduce airline's
benefits from lower fuel costs. A more than 30-percent reduction on domestic jet
fuel prices went in to effect midnight yesterday.
According to calculations
by Sinolink Securities, lower passenger surcharges could cost the airline
industry 22 billion yuan in earnings next year.
The NDRC also lowered the
benchmark prices for gasoline yesterday to 5,580 yuan per tonne, down 14
percent, while that for diesel was adjusted to 4,970 yuan per tonne, down more
than 18 percent.
Shares of airliners gained across the board as of 2:40 p.m..
China Southern Airlines added 3.05 percent to 3.72 yuan. China Eastern Airlines
advanced 4.94 percent to 4.46 yuan. Air China was up 1.31 percent to 4.63
yuan.
Xinhua
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