Domestic airlines seek price hikes

Facing higher fuel prices, the nation's four smaller air carriers have recently applied for permission to raise rates on domestic routes, company officials said yesterday.

As the Civil Aeronautics Administration (CAA) does not allow air carriers to levy fuel surcharges on domestic routes, the airlines said they intended to seek price adjustments to cover rising costs.

TransAsia Airways (復興航空) applied to CAA late last month to raise ticket prices by 25 percent on all domestic routes.

The Taipei-Kaohsiung fares would increase from NT$1,900 to NT$2,375 per trip, said Janet So (湛華生), TransAsia's public relations manager.

Other carriers that mainly run domestic flights, including Far Eastern Air Transport Corp (遠東航空), UNI Airways (立榮) and Mandarin Airlines (華信), filed similar applications with CAA last month.

CAA permitted carriers to pass on increased expenses to their customers on international flights -- with a surcharge of US$5 per ticket on flights within Asia, and US$13 per ticket on long-haul flights to outside Asia -- until March 15 next year.

The aviation regulators will review the proposals submitted by the four carriers this month, said a CAA official who spoke on condition of anonymity.

The new ticket prices may take effect as early as next year if they are approved by the Ministry of Transportation and Communications.

The current rates have been fixed since 1999.

"We hope the new rates will be passed as soon as possible," said Hanson Chang (張有朋), senior public relations manager for Far Eastern Air. "But the extra costs in fuel cannot be fully covered even if the suggested increases are accepted by the authorities."

Rising fuel costs have placed an extra burden on the nation's airlines, which are already suffering from a drop in passengers.

Chang said carriers flying domestic routes have been seeing passenger traffic drop in recent years. In the past, the four carriers jointly transported 19 million domestic passengers a year, but for the first half of this year, only 5.5 million flew.

He attributed the decline to local industries' migration to China, which reduced domestic business travel. The volume will face further steep declines when the north-south high-speed railway starts service next year, leaving enough domestic air business for only two carriers, Chang said.

The four carriers previously were looking at merger possibilities, but Chang said this plan is not viable due to the difficulty of integrating fleets and resources.

"We, as well as other smaller carriers, can only expand international routes to survive ? [and] the long-awaited liberalization of direct transportation with China is our largest hope," Chang said.

Far Eastern Air currently flies to 17 overseas destinations in Asia on a regular or chartered basis, which Chang said constitutes 35 percent of the company's total revenues.