Ministry approves hike in domestic flight tickets

FAIR PRICE?:Airfares are to be increased to reflect the rise in fuel prices, the transport ministry said, while assuring residents of outlying islands of fare subsidies

By Shelley Shan  /  Staff reporter

Fri, Aug 02, 2013 - Page 3

The Ministry of Transportation and Communications yesterday approved a proposal to increase domestic flight ticket prices by between 4 percent and 21 percent on the condition that airlines cut fares for off-peak hours.

The new fares are scheduled to take effect on Jan. 1, said the ministry, which made the announcement after residents of outlying islands threatened to stage a protest over the price increase tomorrow.

The government has not adjusted domestic airfares since 2005, although fuel prices have risen to NT$27 (US$0.90) per liter from NT$13 during that period, the ministry said in a statement. Faced with financial losses, airlines are reluctant to continue offering domestic flight services and to expand their fleet, it said.

The price hikes will only reflect increases in fuel prices, the ministry said, adding that it has communicated with flight carriers about the need to minimize the price increase as much as possible.

Aside from subsidizing residents of outlying islands in purchasing homebound tickets, the ministry said it would introduce other complementary measures, including reducing the aircraft landing fee.

“We expect that travelers will be able to buy tickets for flights operating at off-peak hours at a discount to the nominal ticket price,” said Lin Rong-cheng (林榮正), section chief of the ministry’s aviation and navigation department.

There are 24 domestic flight routes: Aside from flights to Kinmen, Matsu, Penghu and other outlying islands, airlines offer services to Hualien, Taitung and Hengchun (恆春) in Pingtung County.

Chu Kuan-wen (朱冠文), director of Civil Aeronautics Administration’s (CAA) air transport division, said the agency would continue subsidizing registered residents of outlying islands in buying homebound tickets using the Civil Aviation Operation Fund (民航作業基金), which would pay for the differential when ticket prices increase.

Residents in the outlying islands would not feel the difference in the price increase, Chu said.

The government spends about NT$640 million per year to fund ticket purchases by residents of outlying islands, with about 1.17 million residents receiving such funding last year, accounting for about a quarter of the passengers heading to outlying islands.

Chu said the CAA would calculate the increase in funding needed to pay for the increase in airfares.

Residents of Hualien, Taitung and Hengchun as well as those who are not residents of outlying islands would have to pay adjusted ticket price without any government subsidy.

Some people have questioned the fairness of the airfare subsidy. For example, with Kinmen County residents already benefiting from the huge profit that Kinmen Kaoliang Liquor Inc is making, soem have questioned why taxpayers have to continue subsidizing their airfare, while residents of Hualien, Taitung and Hengchun do not.

“Residents of outlying islands rely heavily on air transportation, whereas those on the east coast have other alternatives, including railways and highways,” Lin said.