Airline Fuel Surcharge Set to Increase by 157% Due to Rising Crude Oil Prices

Taipei: Fuel surcharges for both short-haul and long-haul international aviation routes will rise dramatically starting April 7, the Civil Aeronautics Administration (CAA) said Wednesday, due to a surge in crude oil prices.

According to Focus Taiwan, CAA Director-General Ho Shu-ping announced at a Legislative Yuan's Transportation Committee hearing that fuel surcharges for Taiwanese carriers will increase by US$27.50 for short-haul routes and by US$71.50 for long-haul routes. This adjustment will bring the surcharges to US$45 on short-haul routes and US$117 on long-haul routes, marking a 157 percent increase.

The increase in crude oil prices follows the recent geopolitical tensions, as attacks on Iran by the United States and Israel commenced at the end of February, leading to Iran closing the Strait of Hormuz. Consequently, Brent crude prices have surged by over 60 percent.

For domestic routes, Ho indicated that ticket prices will rise by an average of NT$97 (US$3.03) to cover additional fuel costs. However, the Civil Aviation Operation Fund will absorb part of the increase for routes between Taiwan and its offshore islands. While there are no fuel surcharges on domestic routes, domestic fares can be adjusted to cover higher fuel costs if CPC Corp., Taiwan raises fuel prices for three consecutive months. Ho did not specify when these domestic hikes would begin.

During the hearing, Transportation Minister Chen Shih-kai noted that the surge in fuel prices is exerting financial pressure on local airlines. The announced fuel surcharge hikes aim to alleviate this strain. Fuel prices constitute about 40 percent of airlines' operating costs, based on market estimates.

The CAA has directed local carriers to appropriately disclose information regarding the fuel surcharge increases to passengers, travel agencies, cargo shippers, and cargo owners to prevent unnecessary disputes.