Air fares expected to increase

posted September 12, 2018 at 10:40 pm
by  Joel E. Zurbano
Air fares are expected to increase following the government’s approval allowing Philippine carriers to reimpose fuel surcharges.

The Civil Aeronautics Board issued a resolution granting the petition of some local airlines, including Philippine Airlines and Cebu Pacific Air, to impose a fuel surcharge that was disallowed in 2015. 

The local airlines made the petition amid the increasing cost of aviation fuel in the global market.

CAB said the price of aviation fuel in the global market rose to $85.16 per barrel in April. 

This was 25.24 percent higher than $63.66 per barrel in the same period last year.

“As airlines are now a primary mover of trade and transport, a matrix of fuel surcharge shall allow them to thrive and be more competitive in the global market,” CAB stated in its resolution.

“Fuel surcharge is not a part of the basic airfare and may be reduced or removed depending on the price of jet fuel in the market, in accordance with prevailing international practice,” the resolution said.

Under the resolution, passengers of one-way domestic flights may be charged from P34 to P769, while those traveling overseas may be charged an additional P163 to as much as P9,860, depending on the destination and the prevailing jet fuel costs.

The fuel surcharge will take effect immediately, and will be the same for all passengers—adults, children, and infants occupying seats. 

The resolution, however, stated that infants without seats are exempt from the fuel surcharge.

CAB assured that the approved matrix for fuel surcharge on local and international flights was based on a comparative study with other states.

Early this year, lawmakers warned CAB officials against hastily authorizing commercial airlines to impose fuel surcharges on its passengers.

They said the additional charges would hurt the estimated 25-million Filipinos relying on domestic air travel every year.

The lawmakers added the new charges would also weigh down on the 7,000 Filipino contract workers—new hires as well as rehires—leaving the country every day for overseas employment.

Last May, Lance Gokongwei, Cebu Pacific Air president and chief executive officer, said the airline had no choice but to apply for a fuel surcharge because of the higher cost of oil in the world market and the weakness of the peso.

“Fuel price and currency changes have been quite significant. In aggregate, we spend P700 million more per month to fly the same flights,” Gokongwei said. 

Topics: Civil Aeronautics Board , Philippine Airlines , Cebu Pacific Air , Lance Gokongwei
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