OREANDA-NEWS. July 06, 2012. Xiamen Airlines said that it will lower fuel surcharges on its domestic routes from Thursday on, as aviation fuel costs have fallen.

Fuel surcharges for routes of shorter than 800 km will drop from 70 yuan (11.11 U.S. dollars) to 50 yuan, while surcharges for routes exceeding 800 km will decrease from 130 yuan to 100 yuan, Xiamen Airlines said in a statement on its website.

The carrier's announcement came after the country's domestic aviation fuel prices were lowered to 6,724 yuan per ton on Monday from 7,464 yuan per ton.

Industry insiders said other airlines will likely cut fuel surcharges by the same amount as Xiamen
Airlines has announced.

Fuel expenses account for more than 40 percent of domestic carriers' total operating costs. The country's aviation industry relies on the global fuel supply.

Crude oil prices may climb slightly in the short term, but will resume a downward trajectory during the second half of the year to below 80 U.S. dollars per ton, Sun Chao, an analyst at Ping An Securities, said.

Large-scale development of shale gas in the United States and global economic uncertainties have dampened demand for crude oil, Sun said.

Sun, however, warned that a growth pact worth 120 billion euros (149.8 billion U.S. dollars) unveiled by EU leaders last week will help lift global crude demand, and an embargo on Iranian crude oil exports will lead to reduced supplies and higher prices.