China Airlines (華航) and EVA Airways Corp (長榮) have received permission from the nation's civil aviation regulator to extend a surcharge by six months to shield their earnings from surging fuel prices.
China Airlines and EVA can keep their surcharges at US$5 per passenger on domestic flights and US$13 per ticket on long-haul flights until March 15 next year, said Chen Chia-li (
"We applied to extend the surcharge to cover high fuel costs," said Roger Han (
"We'll cancel it if oil prices fall to normal levels," he said, without elaborating.
The price of jet fuel surged to a 14-year record of US$55.95 a barrel on Aug. 20 and traded at US$50.28 a barrel yesterday in Singapore, according to oil pricing service Platts.
High oil prices have undermined the profits of China Airlines and its competitors. Fuel costs may cause combined losses of as much as US$6 billion on airlines' international routes, the International Air Transport Association said last month.
China Airlines in March said it fixed 70 percent of its fuel consumption for this year to help avoid losses from increased prices. Last year it hedged about 60 percent of its fuel needs.
"Even though we hedged, it wasn't enough and we're still exposed to high fuel prices," Han said.
RSS