The Consumers' Foundation (CF) yesterday called for airlines to reduce passenger ticket fares for direct charter flights across the Taiwan Strait by 42 percent to reflect a sharp decrease in fuel oil costs, after such flights start operating on a daily basis starting from Dec. 15. Hsieh Tien-jen, chairman of the CF, issued the call at a press conference held yesterday morning in response to the fact that ticket prices for current weekend cross-strait charter flights operated by TransAsia Airways, EVA Air and China Eastern Airlines are higher than those for flights that have to transit at Hong Kong.

Daily direct charter flights across the Taiwan Strait will kick off Dec. 15 without having to flying over the air traffic control zone of Hong Kong, thus reducing the flight mileage by at least 57 percent, compared to that for current weekend charter flights having to passing over the said zone.

This, coupled with the fact that international crude oil prices have plunged by 61 percent since July this year, has provided reasonable cicumstances for airline firms to cut their ticket fares for direct charter flights across the Taiwan Strait by 42 percent, according to Hsieh.

If the fuel oil price is set at US$100 per barrel, the price would drop to US$39 after a 61 percent cut.

Furthermore, after taking into account a 57 percent reduction in flight mileage for direct charter flights across the strait to take off starting Dec. 15, the oil price would shrink further to only US$16.8 per barrel. This will mean a 84 percent drop in oil cost from the original US$100 per barrel, Hsieh said.

As Philip Wei, chairman of the China Airlines, used to told the press that fuel oil expenditure usually accounts for 50 percent of his firm’s total operating costs, the passenger ticket prices for direct cross-strait charter flights should have room for a 42 percent cut, Hsieh stressed.

Based on a 42 percent cut, Hsieh continued, the single-trip flight from Taipei to Shanghai can see the ticket fare be slashed by the range of NT$8,100-NT$10,500 to the range of NT$11,211-NT$14,429, if the tickets are valid for one year.

The price for single-trip flight between Taipei and Shanghai should be lowered by the range of NT$6,400-NT$7,100 to the level of between NT$8,968-NT$9,744, should the tickets remain valid for 90 days.

And the corresponding price should be cut by NT$5,100-NT$6,000 to the level of NT$7,168-NT$8,254 if the tickets are valid for 30 days.

The CF chief also urged the Civil Aeronautics Administration to allow foreign airlines to operate direct charter flights between Taiwan and China if airlines of both sides fail to reduce their ticket fares to reasonably reflect oil price cuts, as the resultant competition will effectively cause the flight ticket prices to drop.

In response, Lee Wen-long, director general of the CAA, said that the passenger flight business is subject to free market competition. "Passengers can make comparisons between prices offered by different airline firms, and the choose one offering more reasonable prices," Lee said.

Most airlines remained reluctant to respond to the calls by the Consumers' Foundation, only saying that the ticket prices are mainly determined based on market mechanisms and the pricing strategies adopted by competitors.