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Airlines Raise Fuel Levy due to Oil Costs
    2008-05-27 11:45:25     Shanghai Daily

China Southern Airlines and Hainan Airlines will raise fuel surcharges on international routes by 33 percent from June 1 to offset pressure of oil price increases.

The levy will increase to 800 yuan (US$115) from 600 yuan per passenger flying between the Chinese mainland and Europe, the United States, Africa and Middle East.

This is the second increase since January 1, when domestic airlines raised the surcharges by 30 percent.

A fuel surcharge is a type of aviation tariff which requires the approval of relevant aviation authorities before airlines could impose it. With jet-kerosene prices continuing to hit record high, domestic carriers are also hedging their fuel purchases.

Jet fuel rose 6.8 percent last week in Singapore to US$172.70 a barrel. The price has doubled in the past year.

China Eastern Airlines plans to hedge 40 percent of its fuel needs this year, up from 30 percent last year, its board secretary Luo Zhuping told media.

Air China Ltd, the nation's largest international carrier, will hedge about half its fuel needs this year, little changed from last year, and China Southern Airlines also plans to increase its hedging this year.

The higher fuel prices have also hindered foreign carriers from flying to the mainland.

US Airways delayed the launch of its new Philadelphia-Beijing service for one year from 2009 to 2010 as it would have to pay more than US$90 million annually for fuel costs, almost doubling previous estimates.

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