Japan Airlines Corp., struggling to deal with soaring jet fuel prices, said Thursday it will raise fuel surcharges on international flights by 700 yen to 5,600 yen, depending on the route, starting Oct. 1.
JAL also said it will suspend flights between Nagoya and Manila and cut the number of flights between Tokyo and Chicago starting Oct. 29. The carrier will instead add flights on its profitable routes to Southeast Asia and China.
“Oil prices have been rising and don’t seem (likely) to calm in the foreseeable future,” JAL Senior Vice President Tetsuya Takenaka told reporters in Tokyo. “We have many long-distance routes and thus consume a large amount of fuel. . . . We will continue our efforts to counter higher fuel prices, but it’s more than we can absorb.”
JAL has been increasing surcharges on international flights since introducing them in January 2005. After the hike, they will run from 2,000 yen to 17,100 yen per ticket. They now range between 1,300 yen and 11,500 yen.
The country’s largest air carrier said the increase in fuel surcharges will generate 13 billion yen in revenue for the six months to March.
At the beginning of fiscal 2006, JAL forecast its fuel costs for the full fiscal year to next March at 406 billion yen. But with prices of Singapore kerosene hitting $90 per barrel, the airline now expects its fuel bill to reach 423 billion yen, nearly double the 240 billion yen it spent on fuel in 2004.
Although All Nippon Airways Co. has not decided whether to raise surcharges on its international routes, the No. 2 carrier is likely to follow JAL’s lead.
JAL has been trying to reduce fuel consumption and cut purchasing costs by hedging. Takenaka said the carrier is also considering selling off assets to cover the higher fuel prices.
As for its revised route plan, JAL said it will suspend all flights on its unprofitable Nagoya-Manila route. Previously JAL had four flights a week between the cities, but they were only 40 percent full, on average.
The number of flights between Tokyo and Chicago will be cut from two daily to one. Meanwhile, ANA said in May it will resume service on the route in the fall in response to rising demand for business travel.
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