China to raise fuel surcharge on domestic flights

SHANGHAI, Nov 3 (Reuters) - China will raise the fuel surcharge for passengers on domestic air flights this month, easing the cost burden for airlines after a 10 percent rise in jet fuel prices, the official Shanghai Securities News said on Saturday.

The surcharge will be raised to 60 yuan ($8) per passenger from 50 yuan for flights of less than 800 kilometres (497 miles), and to 100 yuan from 80 yuan for flights of 800 kilometres or more, effective Nov. 5, the paper said.

It said analysts expected the surcharge hike to reduce the burden of higher fuel prices, although this effect may be limited due to intense price competition among domestic carriers, which include China Southern Airlines Co Ltd (600029.SS) (1055.HK), Air China (601111.SS) (0753.HK) and China Eastern (600115.SS) (0670.HK).

China on Thursday raised domestic gasoline, diesel and jet fuel prices by 500 yuan, or about 10 percent, following growing nationwide fuel shortages, as rising global oil prices spurred refiners to cut output in order to avoid incurring losses. ($1=7.454 Yuan)