Airfares up as fuel surcharge soars

MANILA, Philippines, April 26 ------ Filipinos booking flights until end-April should brace for higher airfares of up to P15,400 after the government approved an increase in fuel surcharge to a record Level 19.

In an advisory, the Civil Aeronautics Board (CAB) increased the fuel surcharge to a new high of Level 19 for April 16 to 30, from Level 8 in the previous two-week period, authorizing airlines to raise fares. This is now the highest level that the fuel surcharge has reached, highlighting a worsening impact of supply disruptions triggered by US-Israel attacks on Iran.

At Level 19, airlines can slap a fuel surcharge of P627 to P1,834 for local flights and P2,070.77 to P15,397.15 for international trips, depending on the distance. Level 19 is just a notch lower than the peak Level 20. Passengers on transpacific flights will pay the highest cost. Based on CAB’s matrix, carriers can apply a fuel surcharge of P14,663.96 on flights to North America, including Canada and the US.

Locally, Filipinos will pay fuel surcharge of P1,709 for Manila flights to Cotabato, Davao and Zamboanga and P1,834 to General Santos City. CAB sets the exchange rate at P59.95 to $1 for airlines collecting fuel surcharge in foreign currencies. Currently, CAB is adjusting the fuel surcharge every 15 days – suspending the usual coverage of 30 days – allowing more flexibility for the regulator in controlling rates based on developments in the oil market.

Low-cost carrier AirAsia Philippines said the surcharge hike would allow airlines to stem losses from the increase in jet fuel prices. The airline owned by Malaysian tycoon Tony Fernandez also said jet fuel prices have more than doubled compared to a year ago. The country’s leading carriers Cebu Pacific and Philippine Airlines are also reducing their scheduled flights to save jet fuel in light of price hikes. Based on estimates from Cirium, PAL is bringing down May capacity by nearly 10 percent.

According to the monitor of the International Air Transport Association, jet fuel prices have gone down by seven percent to $184.63 per barrel as of April 17, but this is still far from the pre-crisis level of below $100.

Source: philstar.com