Taiwan's major airlines freeze fuel surcharges for May

Taipei, May 5 (CNA) Taiwan's major airlines will keep fuel surcharges on international passenger flights unchanged in May, maintaining rates of US$45 for short-haul routes and US$117 for long-haul routes.

EVA Airways and Starlux Airlines said in notices issued Monday that surcharges implemented on April 7 for flights departing from Taiwan will remain in effect.

China Airlines (CAL), Taiwan's largest carrier, also said it would keep surcharge levels unchanged in May in accordance with the Civil Aviation Administration's (CAA) pricing mechanism, though it said it would continue to monitor global crude oil price trends.

Under the current scheme, passengers departing from Taiwan on short-haul routes, including flights to Hong Kong, will continue to pay a fuel surcharge of US$45 per flight segment, while travelers on long-haul routes will pay US$117 per segment.

The decision to freeze the surcharges came despite what the airlines say is a significant gap between market fuel prices and the industry's baseline.

Data from state-run refiner CPC Corp., Taiwan showed that average aviation fuel prices reached US$208.78 per barrel in May, far exceeding the US$40 benchmark on which fuel surcharges are based.

As a result, carriers said they are absorbing a substantial portion of the higher fuel costs.

EVA Air estimated its additional fuel cost per passenger at US$797.82 on long-haul routes and US$133.50 on short-haul routes.

After deducting the approved surcharges, the airline said it would absorb about 85 percent of the additional fuel cost on long-haul services and 66 percent on short-haul flights, up slightly from 65 percent for short-haul routes in April.

Starlux Airlines estimated its additional fuel cost per passenger at US$271.14 on long-haul routes and US$61.58 on short-haul routes.

After deducting the surcharges, the carrier said it would absorb about 66 percent and 43 percent of the added fuel costs, respectively, both slightly higher than the 64 percent and 42 percent recorded in April.

The current surcharge levels were initially set following a CAA announcement on April 1, which saw rates jump from US$27.50 to US$45 for short-haul flights and from US$71.50 to US$117 for long-haul flights, effective April 7.