China has raised prices for jet fuel sold to airlines by about 9 percent from July 1, aviation regulators and analysts said on Wednesday, keeping pace with sky-rocketing international prices.
The CNY720 yuan (USD$105) per tonne increase, confirmed by officials at the Civil Aviation Administration of China, follows a surprise increase in ex-refinery jet fuel prices of CNY1,500 per tonne from June 20.
"The increase in jet fuel prices could put further pressure on our costs," Huang Bin, company secretary for Air China said.
Huang confirmed that Air China had received the notice on the price rise.
Analysts said that amounted to an increase of about 9 percent, and might put more pressure on the bottom line of carriers such as China Southern, China Eastern and Air China.
The Hong Kong-listed shares of Air China were up nearly 5 percent on Wednesday, tracking gains in the broader market and boosted by lower oil prices. Shares in China Eastern jumped nearly 6 percent, while China Southern was up 5.5 percent.
Chinese authorities adjust jet fuel prices once a quarter under a mechanism in place from July 2006 that takes into account import costs, but which has in most of the past two years shielded airlines from high global oil prices.
Airlines, including Air China and China Southern, are considering applying to regulators to further increase domestic fuel surcharges to compensate part of the fuel price rise, industry sources said.
