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Fuel surcharge fees may not be the cure
By AMY CHEUNG
Published: August 01, 2006 12:00 AM
The increase of fuel surcharge fees may not be the long-term cure for the continuous deficit the aviation industry suffers, the Beijing News reported.   Airlines want to increase the fuel surcharge fees to release the pressure of sky-high oil prices and balance the rising cost. However, experts said that such strategy is a double-edged sword. While the measure can directly reduce the number of customers, it would thus in turn reduce the income of the airlines. Therefore, raising the fuel surcharge fees cannot solve the deep-rooted deficit.   Experts also added that the General Administration of Civil Aviation and the State Development and Reform Commission should accelerate reform in the aviation sector and replace various monopolies. For example, one of the factors contributing to the high level of aviation oil, which stays on 15 to 20 percent more expensive than international average, is because national supply of aviation oil is monopolized solely by China Aviation Oil; The standard landing fees and aircraft repair fees at Chinese airports are two to three times higher than the international average. In this sense, instead of increasing fuel surcharge fees and transferring the cost to the customers, to increase competition in the industry is more constructive in controlling airlines' operation costs in the long run.
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