Beijing raises domestic fuel prices 4.35%

The Chinese government has raised domestic jet fuel prices to CNY8,061 ($1,275) per ton, up 4.35% from CNY7,725 per ton as international fuel prices keep rising.

This is the third time the Chinese government has raised domestic fuel prices this year. Beijing increased domestic fuel prices by 1.43% and 3.48% to CNY7,465 per ton and CNY7,725 per ton, respectively, in February and March.

Fuel costs comprise more than 40% of China’s big three carriers total operating expenses.

China Southern Airlines (CZ), which operates 80% of its flights on domestic routes, could see its fuel costs increase by CNY873.6 million annually. Air China (CA) and China Eastern Airlines (MU), which operate 70% of their flights on domestic routes, could see their annual fuel costs rise by CNY748.2 million and CNY774.1 million, respectively.

Chinese carriers have also raised fuel surcharges on domestic routes but industry analysts say it cannot offset rising fuel expenses. They reported a collective net loss of CNY540 million in February, citing the rising fuel expenses as the main reason to the big reversal from a net income of CNY1.34 billion in the year-ago period.

Article Source : ATW Daily News