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Taiwan's Airlines to raise fuel oil surcharge in mid-November.

Taipei, Nov. 16, 2010 (CENS) -- As the aviation industry worldwide encounters thinner profits due to rising oil prices, Taiwan's leading airlines, including China Airlines Ltd. (CAL), EVA Airways Corp. and TransAsia Airways Ltd., will raise fuel oil surcharge beginning Nov. 15.

The fuel oil surcharge for one-way tickets will be raised to US$20 from the present US$17.5 for short-range flights and raised to US$52 from the present US$45.5 for long-haul routes.

The container shippers however face difficulty to raise fuel oil surcharge due to over-capacity, instead to avoid underselling in freightage to offset skyrocketing fuel oil expenditures.

Regulations set by the Civil Aeronautics Administration says the airlines can offset 40% of the additional spending in fuel with surcharge.

CAL uses 15 million barrels of fuel oil yearly, so spends an additional NT$450 million per year for every US$1 rise in oil price. If the average oil price stands at US$87 per barrel in the fourth quarter, CAL will spend an additional NT$1.013 billion. Despite the surcharge, the company still faces NT$608 million in additional fuel spending.

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Article Details
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Author:Shen, Ben
Publication:The Taiwan Economic News
Article Type:Brief article
Geographic Code:9TAIW
Date:Nov 16, 2010
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