Hong Kong: Another Fuel Hit for Airline Passengers
Jul. 30, 2008
A further 44 airlines have had the green light to increase fuel surcharges to as much as HK$924 despite world oil prices stabilizing.
Nine airlines, including Cathay Pacific Airways and Dragonair, received approval last week. The increases, which come into effect on Aug. 1, will affect the tourism industry in the second half of the year, the Hong Kong Tourism Board said.
Airlines that will raise their surcharges to as much as HK$231 for short-haul flights and HK$924 for long-haul flights include Air Canada, Air China, Air France, British Airways, China Airlines, Continental Airlines, Northwest Airlines, Qantas Airways, Qatar Airways and United Airlines.
Hong Kong's Civil Aviation Department reviews fuel surcharges every two months, adjusting the levels accordingly when aviation fuel prices go down. Current surcharges range from HK$118 to HK$710 depending on the route and airline.
There is a time lag between the actual fuel price and surcharge and the recent fall in oil prices can only be reflected later. The price of oil hovered about US$122 (HK$951) a barrel recently compared with US$140 early this month.
Fuel surcharges, inflation and the economic slowdown will all have an impact on outbound travel, said a spokeswoman for the tourism board. In addition, visitors will spend less in Hong Kong since prices of their air tickets have gone up. She said the board will work closely with government and the trade to reduce the impact.
On Jul. 29, a number of people planning to spend their summer holidays overseas rushed to travel agents to buy their tickets before the surcharge takes effect.
"Our business has jumped about 50 percent these last few days with people trying to beat the surcharge. It will quieten down from Aug. 1," Four Seasons Travel Services assistant to director Jady Djeu said.
The phenomenon, she added, began at the end of May when surcharges climbed 37 percent on Jun. 1.
"Overall our business has declined around 30 percent compared with the same period last year. People who need to take working trips will fly but most are less willing to travel now," Djeu said.
There was a similar situation in several other travel agencies.
"We had a lot of clients buying ticket plus hotel packages, about 20 percent more than the same period last year," Sunflower Travel Service assistant general manager Anthony Chan Hung-cheong said.
But Chan said overall business had been affected by the fuel surcharges and inflation. "Even though the number of people joining outbound tours has been maintained, many prefer the shorter trips to such places as Southeast Asia, South Korea and Japan rather than Europe and the United States," he said.