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Airfares and cargo rates could be lower soon as the Civil Aeronautics Board further decreased the level of passenger and cargo fuel surcharge that airlines may impose for May 16-31
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CAB has set the applicable fuel surcharge rates to Level 15 for May 16-31, lower than the Level 18 and Level 19 imposed in previous periods
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Level 15 for passengers range, depending on distance, from P491 to P1,436 per passenger on a domestic flight, and P1,621.42 to P12,056 per passenger on an international flight
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For cargoes, Level 15 rates range, depending on distance, from P2.52 per kg to P7.38 per kg on a one-way domestic flight, and from P8.34 per kg to P61.98 per kg on a one-way international flight originating from the Philippines
Airfares and cargo rates could be lower soon as the Civil Aeronautics Board (CAB) further decreased the level of passenger and cargo fuel surcharge that airlines may impose for May 16-31.
CAB has set the applicable fuel surcharge rates to Level 15 for May 16-31, lower than the Level 18 imposed for the first half of May and the Level 19–the highest implemented so far–in the second half of April.
READ: Air fares to drop slightly with fuel surcharge down one level
Under CAB Resolution No. 25 (2022) or the revised fuel surcharge policy, Level 15 for passengers range, depending on distance, from P491 to P1,436 per passenger on a domestic flight, and P1,621.42 to P12,056 per passenger on an international flight.
For cargoes, Level 15 rates range, depending on distance, from P2.52 per kg to P7.38 per kg on a one-way domestic flight, and from P8.34 per kg to P61.98 per kg on a one-way international flight originating from the Philippines.
Airlines seeking to collect or impose fuel surcharge for May 16-31 must submit an application with CAB on or before the effectivity period, with rates capped at Level 15, according to an advisory dated May 12.
For fuel surcharge to be collected in equivalent currency, the applicable conversion rate for the period will be $1 to P61.18, higher than the P60 previously.
CAB starting this April started implementing the change in fuel surcharge over a 15-day cycle.
Previously, the monitoring and implementation of fuel surcharge rates covered 30 days under Resolution No. 25. The shortened period is part of government measures to address effects of elevated fuel prices, allowing airlines to more frequently reflect changes in jet fuel prices on their fares.
Aside from the higher fuel surcharge, CAB also adopted a 15-day price monitoring and implementation cycle for the imposition of passenger and cargo fuel surcharge for domestic and international flights instead of the one-month cycle.
This is an interim and temporary measure to “mitigate the impact of the fuel price surge on air travel costs significantly affecting the riding the public and airline operations.”
“The shorter cycle of 15-days during this extraordinary period of high volatility in fuel prices shall allow faster response to market changes reducing the lag between actual fuel costs and applicable fuel surcharge,” CAB earlier stated.
It added that this is intended to cushion the impact of fuel price volatility and manage increasing costs.
“The more gradual and incremental implementation of fuel surcharge to be collected from passengers can be a way of softening the impact of higher fuel surcharge increases, and enable faster reduction when fuel prices decline,” CAB explained.
The next and succeeding applicable levels will be announced at least three days prior to effectivity, and the evaluation period will transition to 15 days in accordance with the 15- day implementation period.
The interim measure will be in effect until the current situation stabilizes, or as may be revised or revoked accordingly.
Resolution No. 25 recognizes airlines can choose to charge a fuel surcharge as an optional fee to cover rising fuel expenses and prevent financial losses during fuel price spikes.
According to the resolution: “Fuel surcharge is not a part of the basic airfare and may be reduced or removed depending on the price of jet fuel in the market, in accordance with prevailing international practice.”— Roumina Pablo
