Cathay Pacific Fuel Surcharge increase

The Hong Kong government approved Cathay Pacific Airways application to increase passenger fuel surcharges by 18% in April because of higher global oil prices.
The Civil Aviation Department also approved a request from Singapore Airlines Ltd. (C6L.SG) to raise its fuel surcharges by the same amount, it said.
Fuel accounts for up to a third of an airline's operating cost, and a steep price rise could hurt the industry's efforts to recover from the effects of the global financial crisis.
The fuel surcharge for short-haul flights operated by Cathay Pacific and Singapore Airlines will rise 18% to HK$194 per journey from HK$165, and the surcharge for its long-haul flights will also rise 18% to HK$884 from HK$747.
Ticket prices have to go up by about 5-6 percent just to accommodate the extra cost on their oil," said Andrew Herdman, director general of industry body Association of Asia Pacific Airlines.Cathay Pacific reported a higher-than-expected record profit for 2010, helping its shares rally on the day by more than 4 percent. But rising costs for airlines have seen its shares fall close to 12 percent since the start of 2011.
"With regard specifically to fuel, increased oil prices can be expected to have a significant adverse effect on profitability if they are not recovered through higher tariffs or fuel surcharges or if the effect of their being so recovered is to reduce demand significantly," Chairman Christopher Pratt said in a statement.