Cut to domestic aviation fuel surcharge
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Domestic airlines are expected to lower jet fuel surcharges on internal routes after the National Development and Reform Commission, China's top economic planner, reduced the fees and jet fuel cost.
The NDRC trimmed the domestic aviation fuel cost by 10 yuan (US$1.46) per ton to 5,200 yuan from yesterday till the end of June.
The NDRC also lowered the ceiling of the jet fuel surcharge unit rate on domestic routes by 3.1 percent from yesterday till March 31 next year, it said in a separate statement.
Based on the current fuel cost and rate, the surcharge will remain at 20 yuan maximum per capita for routes shorter than 800 kilometers, and 40 yuan for longer distances compared with 50 yuan previously.
"Taking the widely used Boeing737-800 jet as an example, carriers can save 53 yuan on each flight after the cut in jet cost, but their surcharge will decrease by 1,348 yuan on each flight," said Wu Yunying, an analyst at Changjiang Securities Co.
"China Southern Airlines will gain more from the adjustment than other domestic carriers as its domestic passenger turnover accounts for 80 percent of its total passenger traffic, higher than Air China and China Eastern Airlines," Wu said.
Airlines must adjust their surcharges within five days after the drop in jet fuel costs as part of the NDRC's efforts to protect passenger interest.
The NDRC last year introduced a mechanism that links fuel surcharges on domestic air routes to fuel costs to better reflect crude oil price movements.
