Airline fuel surcharge to go up 157% amid soaring crude oil prices

Taipei, April 1 (CNA) Fuel surcharges for both short-haul and long-haul international aviation routes will rise dramatically starting April 7, the Civil Aviation Administration (CAA) said Wednesday, due to a surge in crude oil prices.

Speaking at a hearing held by the Legislative Yuan's Transportation Committee, CAA Director-General Ho Shu-ping (何淑萍) said fuel surcharges for Taiwanese carriers will increase by US$27.50 for short-haul routes and by US$71.50 for long-haul routes.

That will raise the surcharges to US$45 on short-haul routes and US$117 on long-haul routes, the CAA said in a later statement. The new fuel surcharges represent a 157 percent increase.

Since attacks on Iran by the United States and Israel began at the end of February, eventually leading to Iran closing the Strait of Hormuz, prices of Brent crude have jumped more than 60 percent.

For domestic routes, Ho said ticket prices on domestic routes will go up an average of NT$97 (US$3.03) to cover additional fuel costs, but the Civil Aviation Operation Fund will absorb part of the hike for routes between the island of Taiwan and offshore islands.

There are no fuel surcharges on domestic routes. Instead, Ho said, domestic fares can be increased to cover higher fuel costs when state-run oil company CPC Corp., Taiwan raises fuel prices for three months in a row.

Ho did not indicate when the hikes for domestic routes will start.

Also at the hearing, Transportation Minister Chen Shih-kai (陳世凱) said the surge in fuel prices has put financial pressure on local airlines, and the fuel surcharge hikes announced Wednesday are aimed at easing that pressure.

Fuel prices account for about 40 percent of airlines' operating costs, according to market estimates.

The CAA said it has instructed local carriers to disclose information about the fuel surcharge hikes in an appropriate manner to passengers, travel agencies, cargo shippers and cargo owners to avoid unnecessary disputes.