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Cathay Pacific Receives Approval to Increase Fuel Surcharges

Posted on: Tuesday, 27 May 2008, 03:00 CDT

Cathay Pacific Airways has received approval from the Civil Aviation Department of Hong Kong to increase fuel surcharges to $21.90 for short-haul services in south and northeast Asia and $91 for long-haul services, for a two-month period, effective from June 1, 2008.

The current surcharges are $16 for short-haul services and $66.4 for long-haul services. Even with the latest increase, the airline estimates that they cover only less than half of the increased cost of fuel.

Cathay Pacific has stated that, while it regrets the need to impose this additional surcharge on passengers, it is important for the sustainability of its business that the fuel surcharge level keeps pace with the increase in fuel prices.

The airline pointed out that even with the new surcharges, Cathay Pacific still lags far behind the surcharges imposed by other international airlines, most of which do not have to seek government approval for their surcharges. Most major airlines reportedly levy fuel surcharges of around $120 to $150 per sector on their long haul services, with some charging as high as $180.

Tony Tyler, CEO of Cathay Pacific, said: "The approved increases reflect the soaring jet fuel prices that are posing an enormous challenge to the aviation industry. 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."

Source: Datamonitor

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