JAL feels pinch from increases in jet fuel

   Date:2008/08/22     Source:

JAPAN Airlines Corp will raise surcharges for a sixth consecutive quarter to cover rising jet-fuel costs.

Surcharges on flights between Japan and North America would rise by 5,000 yen (US$46.15) to 33,000 yen one way starting on October 1, the Tokyo-based carrier said in a statement on its Website yesterday.

The surcharge on flights to China would rise to 10,500 yen from 8,500 yen, it said.

The price of jet kerosene, the largest expense for Japan Air, averaged US$163.76 in the three months through July, 31 percent higher than the previous quarter, Bloomberg News reported.

The airline introduced surcharges in 2005 and said it would abolish them if fuel prices fell below an average of US40 a barrel.

JAL has hedged more than 80 percent of its fuel needs this fiscal year, protecting it from the surging price for jet kerosene. Cost reductions, including hedging, allowed the carrier to minimize fuel levies announced yesterday, it said.

The carrier increased its prediction for the price of jet fuel by 45 percent this fiscal year to an average of US$160 a barrel on August 7.

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