Cathay Pacific to cut fuel surcharges
26 Sep 2008
Cathay Pacific Airways has announced that it has received the approval of the Civil Aviation Department (CAD) of Hong Kong to reduce its passenger fuel surcharge.
The reduction in fuel charges for the airline will be applicable for a two-month period, starting 1 October 2008, to $25.1 (HK$196) for short-haul services in South and North East Asia and $106.7 (HK$832) for long-haul services.
The current surcharges are $29.60 (HK$231) for short-haul services and $118.50 (HK$924) for long-haul services.
Even though crude oil prices have dropped recently, jet fuel prices remain high, and continue be an enormous challenge to the aviation industry.
Cathay Pacific says that the average jet fuel price paid by it in the first eight months of 2008 at $142 per barrel was 67 per cent above that paid in the eight months of 2007. Spot prices of $125 on 24 September were nearly 40 per cent higher than the average of $91 in 2007. The airline says that jet fuel costs account for about half of the Cathay Pacific's net operating costs, and changes in surcharges cover only less than half of the increased fuel cost.
A Cathay Pacific spokesman said: ''We understand the CAD's desire to strike a reasonable balance between the interests of the travelling public and those of airlines, but we would like to see further improvements to the passenger fuel surcharges mechanism to more accurately reflect airlines' fuel costs, particularly on ultra long haul routes to destinations such as Europe and North America. The simple fact is that we burn more fuel to enable us to carry the extra fuel required for these non-stop long haul services.''
In its statement, Cathay Pacific said that it regretted the need to impose fuel surcharge, but the airline's fuel surcharges continue to lag far behind the surcharges imposed by other international airlines on comparable routes outside Hong Kong.
The Hong Kong CAD has pointed out that fuel surcharges on Hong Kong routes are much lower than the average at international level, by around 44 per cent on short-haul routes and 58 per cent on long-haul services. Most major airlines currently levy fuel surcharges of some $30 to as much as almost $100 per short-haul sector and surcharges of $160 to more than $200 on long or ultra haul flights are not uncommon, some even at more than $300.
