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Fuel oil surcharge unchanged despite aviation oil price cut

By Du Xiaoli (chinadaily.com.cn)
Updated: 2007-07-05 18:12

The accumulative price cut of aviation oil reached 410 yuan per ton in the first half of 2007. However, the fuel oil surcharge is unchanged, which results in consumers' dissatisfaction, according to the Information Times.

In the latest cut, the price of aviation oil declined by 50 yuan (US$6.58) per ton to 5,830 yuan per ton from July, said the aviation oil supplier South China Bluesky Aviation Oil Co Ltd on July 3. This is the fourth price cut for aviation oil in China since the beginning of this year.

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However, the price adjustment is good news for aviation companies. The price cut will help China Southern Airlines make an additional net profit of around 125 million yuan, and about 100 million yuan for Air China and China Eastern Airlines respectively.

The declining aviation oil price relieves cost pressure for airline companies and all aviation companies reported profits in May. Consumers are confused about the unchanged fuel oil surcharge in the past several months. It was originally collected in order to subsidize companies' oil costs.

Aviation companies have to discount tickets in an effort to attract consumers. "We have no right to adjust the fuel oil surcharge, as the imposition and adjustments of fuel oil surcharges are decided by the National Development and Reform Commission (NDRC) and Civil Aviation Administration of China," said airline companies. Aviation companies also expect the NDRC to establish a floating mechanism for fuel oil surcharge.