Multiple airlines in Hong Kong raise fuel surcharges as all parties seek to find a balance point to address the chain reaction effects

Xinhua News Agency Hong Kong, April 1 (Reporter Wei Huadu) In recent days, global oil prices have fluctuated sharply, and operating pressure has continued to rise for Hong Kong’s transport, passenger, and cargo freight industries. On April 1, several Hong Kong airlines raised their fuel surcharges, drawing attention.

In response to the knock-on effects brought about by rising fuel costs, airlines, the logistics sector, and the Hong Kong Special Administrative Region government are strengthening communication to find a balance between maintaining stable operations and safeguarding Hong Kong’s competitiveness.

March 30: Fuel prices marked inside a gas station in Hong Kong. Photo by Li Zhihua of Xinhua News Agency

To cope with rising fuel prices and control operating costs, Cathay Pacific Airways raised its passenger and cargo fuel surcharges effective April 1. This is its second price increase within two weeks, with the cumulative increase exceeding onefold. Hong Kong Airlines also raised its passenger fuel surcharge again after March 12. Greater Bay Airlines raised fuel surcharges on certain flight segments.

When contacted by a reporter from Xinhua News Agency, Yuen Meiyi, chairwoman of the Hong Kong Logistics Association, said the overall cost estimate has increased by two to three times. Currently, Hong Kong’s fuel surcharge is higher than in nearby areas. In addition, with fewer flights and longer transportation times, cargo freight costs remain high. If the situation continues, shippers may seek other export routes, which could weaken Hong Kong’s competitiveness as an international logistics hub.

Yuen Meiyi suggested that airlines should increase transparency so that the public can understand the specific calculation methods for fuel surcharges. The Special Administrative Region government may re-implement the fuel surcharge approval mechanism.

Lin Shaobo, Chief Executive Officer of Cathay Pacific Airways, said in an interview with the media that the top priority is to maintain capacity, but the issue of airline fuel costs is concerning. If fuel prices remain at twice the level of before March for the long term, passenger and cargo demand will be difficult to sustain.

Yuan Zhenning, executive director of the travel agency company Justgo Tours and Travel, said that changes in airlines’ fuel prices have been too fast. Travel agency staff need to notify passengers frequently, which not only increases administrative costs, but also raises passengers’ travel costs, potentially leading some passengers to cancel their trips or switch to other departures.

Companies such as China Power and Shunfeng Express also announced on the 1st that they would raise their fuel surcharges. Li Zhenqiang, a member of the Legislative Council of Hong Kong, told reporters that it is expected the impact of rising oil prices will gradually expand to all sectors and residents’ daily lives.

He suggested that the Special Administrative Region government should communicate closely with airlines and oil companies, and pay attention to whether the rate of increase in oil prices is reasonable. In the short term, the Special Administrative Region government could introduce corresponding subsidy measures. In the long run, it could cooperate with Mainland China to increase energy reserves and develop green energy.

The Hong Kong Special Administrative Region government said that about 80% of Hong Kong’s petroleum products come from the Mainland, and that all major energy companies have confirmed that Hong Kong’s energy supply is currently stable. In response to airlines’ decision to raise fuel surcharges, the Transport and Logistics Bureau has met with the relevant airlines to emphasize the importance of maintaining the competitiveness of Hong Kong’s international airport, and has also urged airlines to strengthen communication with the cargo industry. It asked airlines to explain to the industry the basis and rationale for the adjusted level of cargo fuel surcharges, and to increase transparency. The Special Administrative Region government will closely monitor airlines’ adjustments to cargo fuel surcharges to ensure that the adjustment process is reasonable and transparent.

On April 1, the Environmental and Ecology Bureau of the Hong Kong Special Administrative Region announced that, effective immediately, it will publish every week the 7-day moving average retail prices of unleaded gasoline and diesel after discounts at outlets for each oil company. It will also publish the market benchmark price trends for international refined oil products during the same period. Residents can refer to the relevant trends to make comparisons and understand changes in oil prices. (End)

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