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Fuel surcharge for airlines rises to Level 17

AIRLINES may charge higher fuel surcharges from Oct. 1 to 15 after the Civil Aeronautics Board (CAB) raised the allowable passenger fuel surcharge to Level 17 from Level 14 in the second half of September. At Level 17, passengers may be charged an additional P559 to P1,635 for a one-way domestic flight and P1,846.10 to P13,726.58 for a one-way international flight, depending on the destination. The new level is the third-highest imposed so far this year, below Level 18 from May 1 to 15 and Level 19 from April 16 to 30. For airlines collecting fuel surcharges in foreign currency, the CAB set the conversion rate at P62.71 to the dollar. Fuel surcharges are fees added to base fares to help airlines offset changes in jet fuel costs. The CAB determines the applicable level using movements in jet fuel prices based on the Mean of Platts Singapore benchmark. The regulator shifted from a monthly review to a 15-day review cycle following volatility in fuel prices amid the conflict in the Middle East. The interim review cycle will remain in place until market conditions stabilize or until the CAB revises or revokes the policy. According to the International Air Transport Association (IATA), jet fuel prices fell by 4.9% week on week to $185.43 per barrel as of Sept. 25 but were 106% higher than a year earlier. Based on CAB’s indicative rates, passengers flying to Singapore, Thailand, and Malaysia may be charged P2,553.19 in fuel surcharge for a one-way trip. The surcharge may reach P2,871.83 for flights to Indonesia, Japan, and South Korea, while some North American routes may carry a fuel surcharge of P13,072.93 for a one-way flight. A June report by IATA said sharp increases in jet fuel prices could lead airlines to adjust networks and selectively reduce capacity as higher fares

AIRLINES may charge higher fuel surcharges from Oct. 1 to 15 after the Civil Aeronautics Board (CAB) raised the allowable passenger fuel surcharge to Level 17 from Level 14 in the second half of September. At Level 17, passengers may be charged an additional P559 to P1,635 for a one-way domestic flight and P1,846.10 to P13,726.58 for a one-way international flight, depending on the destination. The new level is the third-highest imposed so far this year, below Level 18 from May 1 to 15 and Level 19 from April 16 to 30. For airlines collecting fuel surcharges in foreign currency, the CAB set the conversion rate at P62.71 to the dollar. Fuel surcharges are fees added to base fares to help airlines offset changes in jet fuel costs. The CAB determines the applicable level using movements in jet fuel prices based on the Mean of Platts Singapore benchmark. The regulator shifted from a monthly review to a 15-day review cycle following volatility in fuel prices amid the conflict in the Middle East. The interim review cycle will remain in place until market conditions stabilize or until the CAB revises or revokes the policy. According to the International Air Transport Association (IATA), jet fuel prices fell by 4.9% week on week to $185.43 per barrel as of Sept. 25 but were 106% higher than a year earlier. Based on CAB’s indicative rates, passengers flying to Singapore, Thailand, and Malaysia may be charged P2,553.19 in fuel surcharge for a one-way trip. The surcharge may reach P2,871.83 for flights to Indonesia, Japan, and South Korea, while some North American routes may carry a fuel surcharge of P13,072.93 for a one-way flight. A June report by IATA said sharp increases in jet fuel prices could lead airlines to adjust networks and selectively reduce capacity as higher fares weigh on passenger demand. Philippine air passenger traffic rose by 1.24% to 32.65 million in the first half from 32.25 million a year earlier, CAB data showed. Domestic passenger traffic was broadly flat at 17.38 million, while international passenger traffic increased by 2.69% to 15.27 million from 14.87 million. Cebu Pacific declined to comment on the higher surcharge. Other airlines had yet to respond as of press time. — Ashley Erika O. Jose
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