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Chinese airlines raise fuel surcharges for domestic routes

(China Daily)

08:18, September 06, 2012

A China Southern Airlines Co Ltd aircraft takes off from Sanya Phoenix International Airport in Hainan province. (Photo/China Daily)

BEIJING -- Chinese airlines Wednesday increased fuel surcharges on their domestic routes, due to rising aviation fuel costs.

Fuel surcharges for routes shorter than 800 km rose from 50 yuan ($7.94) to 70 yuan, while surcharges for routes exceeding 800 km increased from 100 yuan to 130 yuan.

The hike in costs came after airline companies raised fuel surcharges for their international routes on Saturday, the first increase since June.

Rising global aviation fuel prices were the major reason behind the increases, analysts said. The country's domestic jet fuel prices have risen by more than 700 yuan per tonne since Saturday, data showed.

Soaring jet fuel prices have been wiping out profits at the nation's airline companies, as fuel expenses account for more than 40 percent of their total operating costs.

Air China, the country's flagship airline, posted a 73.87-percent drop in its first-half profit and its fuel costs gained 12.8 percent.

China Southern Airlines, the nation's largest airline in terms of fleet size, reported a 83.7-percent decline in its first-half profit after its fuel bill jumped 26.6 percent.

With high fuel costs and foreign exchange losses, the country's airlines will see their profits down by 40 percent from the previous year in 2012, analysts said.

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