Philippine Airlines asked the government to approve a fuel surcharge of up to P405 on domestic flights to offset the costlier jet fuel prices.
PAL, controlled by billionaire Lucio Tan, asked the Civil Aeronautics Board for approval to charge P282 worth of fuel surcharge each way for Luzon to Luzon and Visayas routes; P405 for Luzon to Mindanao routes; and P158 for Visayas to Visayas routes.
PAL also plans to impose fuel surcharge of P222 for Mindanao to Visayas/Mindanao routes.
The CAB set the hearing for PAL’s fuel surcharge petition on June 27.
A fuel surcharge is a temporary relief granted to airlines to help them recover losses incurred from higher jet fuel prices. Fuel accounts for about 50 percent of an airline’s operating cost per passenger and is the second-highest expense next to labor.
PAL president and chief operating officer Jaime Bautista earlier said the flag carrier was expected to consume a total of 11 million barrels of jet fuel this year, resulting in a $143 million additional costs.
“This is one of the reasons we are urging the government to allow us to collect fuel surcharge,” he said.
PAL’s fuel expense went up by $200 million to $749 million last year from $549 million in 2016, he said.
Data from the International Air Transportation Association showed that jet fuel prices averaged $88.3 a barrel as of June 15, up by 55.8 percent from a year ago.
PAL Holdings Inc., the parent firm of PAL reported a total net loss of P904.7 million in the first quarter, a significant downturn from the P2.71-billion income a year ago.
Revenues climbed to P33.3 billion from last year’s P29.12 billion.
The 14.4-percent improvement in revenues was primarily due to the increase in number of passengers, additional flight frequencies and the introduction of new routes.
Passenger revenues rose to P27.78 billion from last year’s P24.65 billion, while cargo revenues increased to P1.80 billion from P1.47 billion.
Total expenses escalated 32.4 percent to P34.4 billion from the previous year’s P25.94 billion.