Chinese airlines hike fuel surcharge forthird time this year

Air China and other major Chinese carriers have raised their fuel surcharges for domestic routes for the third time this year to help offset cost pressure amid surging oil prices, a newspaper reported on Thursday.

Carriers including China Eastern Airlines and China Southern Airlines raised the fuel surcharge to 140 yuan ($22) from 110 yuan for domestic flights of more than 800 kilometres (500 miles), the newspaper said.

Rates for shorter distance have been marked up to 80 yuan from 60 yuan, it said.

The surcharge by domestic carriers came despite falling global fuel prices, after the National Development and Reform Commission decided to raise ex-factory jet fuel price, effective May 25, to 7,640 yuan per tonne, up from 6,840 yuan.

The most recent fuel surcharge hike for domestic routes happened in April.

Fuel typically accounts for 40 per cent of Chinese airlines' operating costs. Many industry executives, including Li Jun, deputy general manager of China Eastern, had warned of a negative impact on carriers if oil prices continued their uptrend.