The Civil Aeronautics Board (CAB), the country’s aviation regulatory body, has allowed airlines operating in the Philippines to re-impose an aviation fuel surcharge to help them offset the additional operating costs due to higher jet fuel prices in the international market.
On August 17, the CAB adopted a resolution detailing the approved fare matrix for passenger fuel surcharge for domestic and international flights. The resolution was published in a general circulation newspaper on August 30.
The fare matrix details how much fare increase airlines can impose per passenger for a one-way trip. It varies with the distance of the flight as well as the prevailing Philippine peso price of jet fuel per liter. It adopted seven price brackets or ranges for aviation gas. These range from more than Php21 to less than Php24 to Php39 to less than Php42. If the price falls below Php21 per liter, the surcharge is suspended.
For example, surcharge per head for a short domestic trip that’s less than 200 kilometers in distance, such as Cebu-Bacolod, could rise Php34 if the prevailing price is between Php21 and Php24 per liter. If the price goes up to between Php39 and Php42, the surcharge also rise to Php201 per passenger. (See infographic)
In contrast, the surcharge for a trip that exceeds 1,000 kilometers, such as Manila-General Santos, could range from Php132 and Php769, depending on the current jet fuel price.
The CAB reviews the prevailing aviation fuel prices every two months, and announces the allowed maximum surcharge for the coming two-month period. For September and October, CAB used average prices in June and July. It will next review the aviation fuel prices in August and September, and announce the maximum surcharge for November and December on October 15.
The aeronautics board said these measures are done to cope with volatile fuel costs and help carriers maintain revenues. Airlines, however, have to submit petitions to impose the surcharges to the board before they increase their fares.
Two of the country’s biggest airlines, Philippine Airlines and Cebu Pacific Air, already received authorization from CAB to impose surcharges in their airfares. Both companies have started to increase their ticket prices on September 19.
Pauline Macaraeg is Entrepreneur PH's data journalist. Follow her on Twitter @paulinemacaraeg