China will cut jet fuel surcharge on domestic flights from January 21 because oil prices have fallen in the international market.

This is the first drop in fuel surcharge since the General Administration of Civil Aviation of China (CAAC) reintroduced the surcharge in 2005 and lifted it twice in 2006 when oil prices rose to record highs.

A passenger flying less than 800 kilometers will now pay a surcharge of 50 yuan ($6.4) instead of 60 yuan ($7.7), a joint release of the CAAC and the State Development and Reform Commission said yesterday.

And those flying beyond 800 kilometers will pay 80 yuan ($10.3) as surcharge, 20 yuan ($2.56) less than before. Babies, as usual, are exempted, and children and disabled soldiers and policemen will have to pay only half the surcharge.

Domestic airlines earned at least 7 billion yuan ($900 million) from fuel surcharge in the first 11 months of last year, Shanghai Securities News reported yesterday.

But with oil prices are falling now, the reform commission has cut the aviation oil price twice this month. On January 1, the commission reduced the price by 180 yuan ($23) a ton, followed by another 90 yuan ($11.6) cut on January 14.

Aviation oil costs 6,040 yuan ($777) a ton, 4.3 percent less than before.

Most airlines cut their fuel surcharge on international flights after oil prices fell, but passengers on domestic routes, controlled by the CAAC, had to pay the same amount.

Some people had appealed on online forums that the commission and CAAC reduce the surcharge.

But even after yesterday's announcement, some netizens seemed disappointed, saying that the lowered surcharge was "still too high".

Experts say aviation oil accounts for at least 40 percent of airlines' operational costs for most domestic carriers.

(China Daily 01/18/2007 page3)