S.Korea domestic airlines to raise fuel surcharge

SEOUL, June 16 (Reuters) - South Korea will allow domestic airlines raise fuel surcharges on international flights from July to cushion record-high fuel costs, Seoul's transportation ministry said on Monday.

In December, the government allowed airlines to more than double fuel surcharges after crude oil prices rose above $99.00 a barrel. [ID:nSEO114540]

Crude oil prices have neared $140.00 a barrel in recent weeks, surging six-fold since 2002.

A two-way economy-class passenger flight is expected to cost 3.4 percent-5.7 percent more after the hike from July 1, the Ministry of Land, Transport and Maritime Affairs said.

The upper limit for fuel surcharges on international cargo flights would also be raised from July 16, the ministry said in a statement.

Last month, Korean Air Co (003490.KS) and Asiana Airlines Inc (020560.KS) asked the government to raise the upper limit on the 16-stage fuel surcharge system for passenger flights to cope with the rising fuel costs.

Shares in Korean Air were up 4.21 percent as of 0342 GMT, while Asiana Airlies rose more than 2 percent, outperforming the wider market's 1 percent gain.

Jet fuel prices rose to an average of $3.8 per gallon in May, up from $2.5 per gallon in January, the ministry said. (Reporting by Angela Moon; Editing by Anne Marie Roantree)