Wed, Apr 17, 2013 - Page 4 News List

Lawmakers object to airfare increase

PUBLIC INTERESTS:While carriers complain of losses from operating domestic routes, they have been making huge profits from cross-strait flights, lawmakers said

By Shelley Shan  /  Staff reporter

Lawmakers representing constituencies in the nation’s remote areas and outlying islands yesterday voiced their objection to a government plan to raise airfares to these regions, adding that there should not be any change to domestic airfares until complementary measures are in place.

The lawmakers voiced their objection in a public hearing held by the Civil Aeronautics Administration (CAA), which was also attended by local government officials, domestic flight carriers, travel agents and hoteliers.

UNI Airways chief executive vice president Chen Shyong-jyh (陳雄智) said that the last time domestic airfares were adjusted was in 2005 after oil prices rose by 60 percent in 2004 compared with 1999 levels, adding that oil prices have risen by another 105 percent since 2004.

Aside from fuel costs, which account for about 30 percent of a carrier’s operating costs, aircraft maintenance costs have also risen in recent years, he said.

“We have to bear all these cost increases ourselves because we cannot raise ticket prices like the international flight carriers,” he said.

Chen added that local carriers are also plagued by seasonal demand, with extremely high demand during the peak season and extremely low demand during the off-peak season.

He also opposed a plan to bundle profitable cross-strait flights with unprofitable domestic flights, in which carriers would be given exclusive rights to operate profitable cross-strait routes if they are willing to continue offering unprofitable domestic flights.

“Most of our cross-strait flights go to second-tier or third-tier cities in China, and the profit margin is shrinking,” he said.

Democratic Progressive Party (DPP) Legislator Liu Chao-hao (劉櫂豪) of Taitung County said that air services are vital to residents on the east coast and the outlying islands, both in terms of basic transportation needs and for tourism development.

He said the government would be punishing residents in these areas if it does not strictly monitor ticket prices.

“Ticket prices should not rise if the government does not have complementary measures in place,” he said.

Chinese Nationalist Party (KMT) Legislator Yang Ying-hsiung (楊應雄) of Kinmen County and independent Legislator Chen Hsuen-sheng (陳雪生) of Lienchiang County said that while airline companies have suffered losses from their domestic flight services, they have been making huge profits from the increase in the number of cross-strait and international flights.

DPP Legislator Yang Yao (楊曜) said the airlines should use the profits they make from cross-strait flights to cover losses on domestic flights.

The government should take into account not only oil prices, but also the quality of service, such as punctuality and comfort, when determining ticket prices, he said.

The CAA said it would continue to solicit opinions from stakeholders and initiate complementary measures to alleviate the impact on passengers.

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