But No Luck So Far In Lowering Prices

Is it a sign of things to come for US airlines -- or should it be? Four of China's largest airlines have joined together to negotiate fuel prices with that country's dominant aviation fuel importer, China Aviation Oil Corp. (CAO), in response to the organization's decision to allow prices to float more freely on the open market.

The alliance -- comprised of China Eastern, China Southern Airlines, Shanghai Airlines and Air China Ltd -- met to discuss fuel prices after CAO announced last month a new fuel pricing system, that allows China's domestic airlines to negotiate prices within an 8 percent margin set by the General Administration of Civil Aviation of China.

Alas, officials with China Eastern Airlines told the Shanghai Daily the airlines' initial discussion with CAO didn't result in any agreement to lower fuel prices -- as the airlines' desire to lower fuel prices met resistance from the profit-seeking CAO.

China Eastern says its average oil prices jumped 39.4 percent in 2005, to 5,149 yuan (about $640 US) per ton. The airline's total oil costs increased by 2.5 billion yuan, to 8.9 billion yuan -- $1.1 billion US -- in 2005.

FMI: www.ce-air.com (in Chinese)