Special oil charges imposed on air tickets since last November are
set for a downward spiral next month.
The special fees are to be slashed to 8 percent of the total value
of the ticket on Tuesday from its current level of 14 percent.
Sources with industry watchdog General Administration of Civil
Aviation of China (CAAC) said a notice had been distributed to
domestic airlines about the price cut.
CAAC began to impose the special oil charges in November last year
when the international oil price rocketed to nearly US$30 a
barrel.
The move aimed to transfer part of the airlines' heavy oil cost to
passengers to help them get through the difficult time.
CAAC had made it clear when imposing the special oil charges that
the fees would fluctuate with price changes in the international
oil market.
But the administration has decided that now is the time to lower
the charges.
It
is an official response to the sharply declining international oil
price, which has plummeted to less than US$20 a barrel last
month.
The China Aviation Oil Supplies Corporation, the monopoly oil
supplier of the aviation industry, will begin to provide aviation
oil at a lower price to domestic airlines in January, providing
scope for the price-cut.
Sources with CAAC said the special oil charges might be amended
further if international oil prices continue to fluctuate.
In
China's pricing system, the special oil charges imposed by CAAC
were not equal to ticket price.
The total face value of air ticket consisted of two parts: the
basic ticket price and the special oil charges.
The latter is only regarded as preferential measures implemented
inside the aviation industry, and CAAC has the right to raise or
cut the charges.
But CAAC will have to hold a public hearing supervised by the State
Development Planning Commission -- the country's highest pricing
authority -- before any changes could be made on the ticket
price.
Representatives of ordinary passengers, experts, airlines and CAAC
officials can exchange opinion at the hearing, and CAAC would then
adjust the ticket price afterwards by taking all interests into
account.
Sources with the Financial Department of CAAC, which is responsible
for pricing policies, confirmed that changes to special oil charges
are the internal affairs of the aviation industry according to
China's pricing policies and need not be discussed through
hearings.
The sources suggested the air ticket price is unlikely to change
around spring festival when demand for transportation peaks due to
severe competition from roads and railways.
So
without changes to ticket prices, a public hearing is unlikely to
happen inside the aviation industry in the near future.
Sources said the railways, which had improved average speeds to
around 100 kilometers an hour, had turned up the pressure on short
and middle distance air carriers.
And if the air ticket price was raised when demand for transport
was at its highest, more travelers will be pushed to the
railways.
During the 2001 spring festival, only 7 million people traveled by
air. At a time when most trains were over-crowded with passengers
returning home for family reunions, airlines could only fill 70 to
80 percent of seats.
(China
Daily December 29, 2001)