Wed, Nov 17, 2004 - Page 4 News List

PFP urges airlines not to hike fees

NOT PRUDENT Blue camp Legislator Hsu Yuan-kuo said it was inappropriate for air carriers to raise fees while oil prices were dropping and the legislature was in recess

CNA , Taipei

The People First Party (PFP) yesterday urged air carriers to make public their cost structures for air fares and to not rashly raise ticket prices during the current Legislative Yuan recess.

PFP Legislator Hsu Yuan-kuo (許淵國) noted that the price of crude oil in the world market has dropped to around US$45 per barrel from a recent peak of more than US$50 a barrel.

"This is not an appropriate time to raise air fares, especially because the air carriers have not yet made public the cost structure of air tickets," Hsu said.

He noted that raising air fares will lead to a series of price hikes in the transportation sector. As global oil prices go down, the price of air tickets should not be raised, and should instead be lowered, he said.

Hsu's words came one day after the Civil Aeronautics Administration (CAA) convened a review meeting on a proposal by air carriers to raise air fares.

CAA Director General Chang Kuo-cheng (張國政) noted that the price of fuel is only one of the 14 items that air carriers use in calculating the cost of air fares.

With the continued rise in world crude oil prices, air carriers say they have lost the profits they earned in the first 10 months of the year, and have therefore asked to hike air fares.

But review meeting members questioned the link between rising oil prices and the level of airfare hikes. They demanded that the air carriers provide them with more detailed calculations before they discuss air fare hikes further.

PFP Legislator Lee Hung-chun said that in addition to the rising price of air fares, water, electricity and gas, the consumer price index has also been moving up, rising 2.36 percent last month.

Tallies by the Directorate General of Budget, Accounting and Statistics show that wholesale prices increased 12 percent last month over the same month a year earlier, the biggest jump in over 23 years, which Lee said shows that inflationary pressures still exist.

Lee Tung-hao (李桐豪), acting director of the PFP Policy Center, said that the party suspects the government will have to raise taxes in the next three years because of financial difficulties.

He said Executive Yuan spokesman Chen Chi-mai's (陳其邁) recent comment that "the government currently has no plan to raise taxes" was only a way of avoiding the question of whether the government could raise taxes in the future.

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