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Local airlines to raise fares next month

The nation's domestic airlines, including Far Eastern Air Transport Corp (遠東), will raise fares for the first time in more than five years, starting next month, to cover surging fuel costs.

The increase of about 4.5 percent, approved by the Ministry of Transportation and Communications, will affect routes connecting major cities, including Taipei and Kaohsiung, said George Lee (李仲榮), deputy director of the Civil Aeronautics Administration.

"Oil prices have surged so much that airlines are having problems operating," Lee said yesterday.

Jet fuel prices in Taiwan have more than doubled since the last changes in domestic airfares in 1999, Lee said.

Far Eastern and the other airlines have been hurt by higher fuel prices, which, according to the administration, account for about 15 percent to 25 percent of airlines' costs.

Global airlines may report an industrywide loss of US$5.5 billion this year, the International Air Transport Association said earlier this year, basing its estimate on an average oil price of US$43 a barrel.

Far Eastern Air had a loss of NT$133.7 million (US$4.3 million) for the first quarter, compared with a profit of NT$30.7 million a year earlier, according to the Taiwan Stock Exchange Web site.

The company competes with TransAsia Airways Corp (復興), Mandarin Airlines (華信) and UNI Airways Corp (立榮) on domestic routes.
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