China slashes fuel price

CHINA will cut fuel surcharges by as much as 75 percent from 25 December, but only on domestic flights.

The fuel charge on flight routes of more than 800 km will drop to 40 yuan from 150 yuan per passenger while the surcharge for shorter routes will fall to 20 yuan from 80 yuan per passenger. These are now at 2005 levels

As of 19 December, the National Development and Reform Commission (NDRC) lowered the factory price of jet fuel by 2,400 yuan per tonne to 5,050 yuan per tonne.

The cuts should save Air China, China Southern and China Eastern several billion yuan in 2009 compared to losses this year although China Eastern made a modest profit.

Analysts predict that the economic slump will continue however, and that this will only be a temporary reprieve.

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