Cathay gets go ahead to raise fuel surcharge
Cathay Pacific Airways said Tuesday Hong Kong’s Civil Aviation Department has granted the airline approval to increase its air passenger fuel surcharge.
The approval covers a two-month period from June 1, during which Cathay will increase its fuel surcharge to $21.90 for short-haul services in South and Northeast Asia and $91 for long-haul services.
The current surcharges are $16 for short-haul services and $66.40 for long-haul services. The airline estimates that even with the latest increase, it would recover less than half of the increased cost of fuel.
“The approved increases reflect the soaring jet fuel prices that are posing an enormous challenge to the aviation industry,” said Tony Tyler, Cathay's chief executive officer, in a statement. “The situation is having a very serious financial impact on airlines worldwide and we are no exception. Jet fuel prices have reached an unprecedented level and the situation is likely to get worse before it gets better. The price of fuel has doubled since last year and has risen by 55 percent this year alone. At current prices, it costs us $360,000 in fuel alone to fly a 747-400 to London and back.”
Tyler added that jet fuel prices now account for 40 percent of the airline’s net operating costs, compared with 30 percent last year. He also noted that the difference between jet fuel and crude oil prices had widened dramatically in recent months because of additional refinery costs, limited refinery capacity and persistent demand.