China Adjusts Domestic Route Fuel Surcharges Amid Rising Aviation Kerosene Costs

According to a joint notice issued by the National Development and Reform Commission and the Civil Aviation Administration of China, starting from April 5 (based on the ticket issuance date), the fuel surcharge for adult passengers on domestic routes has been adjusted. Passengers on routes below 800 kilometers per segment will be charged 60 yuan, while those on routes above 800 kilometers per segment will pay 120 yuan, a significant increase from the previous 10 yuan and 20 yuan respectively. According to People’s Daily, major airlines including Air China, Xiamen Airlines and China United Airlines have announced the adjustment to implement the new standard.

Aviation fuel is divided into aviation gasoline and aviation kerosene, and the fuel surcharge for domestic routes adopts a linkage mechanism with aviation kerosene prices, charged in two tiers based on flight distance. In the international shipping field, fuel surcharges are usually collected as a proportion of freight or a fixed amount.

Explaining the reason for the adjustment, Zhong Shan, chief economist of the Air Transport Institute of China Academy of Civil Aviation Science and Technology, stated that aviation fuel costs are closely related to international crude oil prices. "Aviation fuel accounts for 30% to 40% of airlines’ total operating costs, making it one of their main expenses," he said, adding that increasing fuel surcharges is an industry practice worldwide for airlines to cope with rising costs.

Han Tao, an expert from China Civil Aviation New Think Tank, noted that the volatile rise in international crude oil prices driven by the Middle East situation has directly led to a sharp monthly increase in China’s comprehensive procurement cost of aviation kerosene, which has exceeded the upward trigger threshold set by the domestic fuel surcharge linkage mechanism. "This adjustment can appropriately ease the rigid cost pressure on airlines, ensure the sustainable and healthy operation of the industry, and further provide passengers with more stable, accessible and high-quality air travel services," he said.

Han Tao analyzed the impact on passengers: it will have little effect on business travelers and those who travel for work, study or family visits, as they will not cancel scheduled trips due to a slight cost increase. However, it will have a greater impact on leisure travelers, who have high flexibility in travel decisions and are sensitive to ticket price changes.

To reduce travel costs, Han Tao suggested: "The most effective strategy is to lock in travel plans in advance and buy tickets during off-peak periods. Domestic ticket prices fluctuate with booking cycles and travel times; booking 7 to 30 days in advance, especially for holidays and peak seasons, can generally get lower discounted tickets, whose price difference can basically cover the increase in fuel surcharges."

Experts believe the civil aviation industry should improve quality and efficiency to cope with fuel cost pressure. Zhong Shan suggested airlines launch differentiated products and customized services for different groups, while Han Tao proposed building a full-process fuel-saving system and accelerating the application of sustainable aviation fuel to reduce costs and enhance competitiveness.