Airline fuel surcharges for int'l routes to go up from Aug. 9

Taipei, Aug. 3 (CNA) Fuel surcharges on both short-haul and long-haul international flights operated by Taiwanese airlines will increase from Aug. 9 following a sharp rise in international aviation fuel prices, the Civil Aviation Administration (CAA) said Monday.

In a statement, the CAA said fuel surcharges for short-haul routes will rise to US$30 from US$27.50, while surcharges for long-haul routes will rise to US$78.00 from US$71.50.

The increase follows an announcement from state-owned CPC Corp. earlier Monday that its reference price for international aviation fuel rose to US$147.57 per barrel this month from US$133.29 per barrel last month, the CAA said.

According to the CAA, CPC updates its international aviation fuel price on the first business day of a month.

The CAA defines short-haul routes as destinations in Asia, excluding India and the Middle East. Long-haul routes include India, the Middle East, Europe, the Americas, Africa, Oceania and Antarctica.

Taiwan's fuel surcharge mechanism was introduced in 2005 after the CAA and local airlines reached an agreement linking surcharges to CPC's monthly international aviation fuel price.

Under the mechanism, carriers do not impose fuel surcharges when CPC's reference price falls below US$40 per barrel, which is the first tier of the pricing mechanism.

When the price ranges from US$40 to below US$50 per barrel, airlines may charge fuel surcharges of US$5 on short-haul routes and US$13 on long-haul routes.

From the third tier onward, airlines may increase fuel surcharges by US$2.50 on short-haul routes and US$6.50 on long-haul routes for every additional US$10 increase in CPC's reference fuel price.

The CAA said it has instructed local carriers to clearly disclose the surcharge increases to avoid unnecessary disputes with passengers and travel agencies.

According to market estimates, fuel accounted for about 40 percent of airlines' operating costs.