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Philippines: Higher fuel surcharge in air fares looms
MANILA, Philippines — Airline passengers could see even higher fares in the next two months should local airlines opt to increase the fuel surcharge.
The Civil Aeronautics Board (CAB) said passenger fuel surcharge for domestic and international flights from Nov. 1 to Dec. 31 would increase to Level 4, which means additional cost of between P108 to P411 per passenger for domestic flights, and from P543 to P5,189 for international flights.
At present, airlines imposing fuel surcharge, like Philippine Airlines and Cebu Pacific, are following Level 3 of the surcharge matrix, which results in a hike of P74 to P291 for domestic passengers, and P381 to P3,632 for international passengers.
The one-notch increase in the surcharge matrix is a result of the continuing rise in the cost of jet fuel.
“For August to September , the price of jet fuel averaged at $90.51 per barrel, with the US dollar exchange rate of P53.61 for the same period. This is equivalent to P30.52 per liter, which corresponds to Level 4 in the passenger fuel surcharge matrix for domestic and international flights,” the CAB said.
The CAB said airlines that plan to collect fuel surcharge for the November to December period must file their application, with proposed fuel surcharge rates not exceeding the stated level.
Officials from PAL and Cebu Pacific earlier said their companies have commenced on Sept. 19 with the imposition of fuel surcharge which is included in the price of airline tickets.
AirAsia, meanwhile, said it has opted not to add fuel surcharge to its domestic and international fares as part of “staying true to its commitment to provide unparalleled low fares.”
Last month, the CAB approved the guidelines on the imposition of the passenger fuel surcharge for domestic and international flights, after it was lifted in 2015.
The reimposition of the fuel surcharge was in line with airlines’peititions given the persisting soaring fuel costs. Fuel cost accounts for over 50 percent of the total operating costs of airlines.
The CAB also adopted a matrix for fuel surcharge that will be determined based on the two-month average of jet fuel MOPS (Mean of Platts Singapore) prices in its peso per liter equivalent and will be fixed for two months.
If the two-month price average of jet fuel per liter falls below P21, no fuel surcharge will be collected.
Based on the published and approved matrix, fuel surcharge rates for domestic flights are divided into five categories, depending on the flight distance. These are from 0 to 200 kilometers (km),201 to 400 km, 401 km to 600 km, 601 to 800 km, 801 km to 1,000 km, and more than 1,001 km.
Meanwhile, for international flights originating from the Philippines, groups are divided into seven, namely: 1) Taiwan, Hong Kong, Vietnam, Cambodia, Brunei. 2) China. 3) Singapore, Thailand, Malaysia, Guam. 4) Indonesia, Japan, South Korea, Port Moresby. 5) Australia, Middle East 6) New Zealand, Honalulu. And 7) North America, United Kingdom.
Source: https://www.philstar.com/business/2018/10/17/1860593/higher-fuel-surcharge-air-fares-looms#LmAKck8psqw6pkAI.99