Tue, Nov 16, 2004 - Page 10 News List

Airlines rebuffed over fare increases

TRAVEL The aeronautics administration refused to grant a request by four of the nation's smaller airlines to raise passenger fares to offset higher fuel prices

By Jackie Lin  /  STAFF REPORTER

The nation's aviation regulator yesterday turned down applications from the nation's four smaller air carriers to hike fares on domestic routes to cover rising fuel costs, citing insufficient information.

The Civil Aeronautics Administration (CAA) demanded that the four operators -- TransAsia Airways (復興), Far Eastern Air Transport Corp (遠東), UNI Airways (立榮) and Mandarin Airlines (華信) -- resubmit their applications for another round of review.

Regulators didn't say when the next meeting would take place.

The carriers previously argued that rates must be raised to reflect higher oil prices. As the 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.

With next month's legislative elections approaching, price increases on airfares are deemed a sensitive issue, said Hanson Chang (張有朋), senior public relations manager for Far Eastern Air.

Before the review committee was convened yesterday afternoon, the Consumers' Foundation (消基會) held a press conference, condemning the approach the carriers are taking, saying they were trampling on consumers' interests.

Given that the second highway is now open and construction on the north-south high-speed railway is to be completed next year, any move by airlines to increase fares will only force potential customers to seek alternatives, leading to further declines in passenger traffic, the advocacy group's secretary-general Terry Huang (黃怡騰) said.

In addition, residents of the islands of Kinmen, Matsu and Penghu -- who depend on airplanes for travel -- would be compelled to accept rising living costs, while tourism on these small islands would be severely affected, he said.

"Since Minister of Economic Affairs Ho Mei-yueh (何美玥) said last Saturday that international oil price hikes have slowed and urged the public not to worry about price fluctuations, airlines should not propose increasing rates before disclosing their pricing mechanism," Sun Li-chun (孫立群), the foundation's financial chief, said.

Sun noted that as airlines reduced the amount of snacks and drinks offered during flights after the SARS epidemic last year, the lower costs and service quality should be reflected in rates too.

"There is no reason whatsoever why price hikes are so urgent at this time," he said.

The foundation suggested that rising oil prices be offset by surcharges that are reviewed every three months.

"Higher rates will lead to lower passenger volume and, one day, the bankruptcy of airlines," the group's chairman, Jason Lee (李鳳翱), said.

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