Aviation Fuel Price Cut by 330 Yuan Per Ton

Although the CAAC recently announced an exemption on the fuel surcharges, now airlines will be able to cut fuel costs even further. According to Shanghai Security News, domestic fuel prices will be reduced by 330 Yuan per ton, because China National Aviation Fuel (CNAF) adjusted the integrated purchasing cost differences. Some analysts point out that the cost of price cuts will be more effective than the earlier fuel surcharge exemption. Eastern Airlines indicated that they had already gotten notice of the reduction from CNAF, which was mostly coming from the integrated purchasing cost differences. This is the first time for CNAF to reduce the price this year, and it is also the most recent reduction for domestic aviation fuel since the Development and Reform Commission on December 19, 2008 announced that they would lower the aviation fuel factory price to 2,400 Yuan per ton. Aviation fuel costs occupy a bigger and bigger proportion of costs in the airline business every year. In 2003, for example, the proportion of the aviation fuel cost has in many cases been risen from 30% to 42%.