CAB hikes fuel surcharge in Aug

• Civil Aeronautics Board hiked the fuel surcharge airlines may impose in August 2024

• CAB upgraded to Level 6 from Level 5 the passenger and cargo fuel surcharge

• Level 6 rates for passengers range from P185 to P665 per one-way domestic flight and from P610.37 to P4,538.40 per one-way international flight

•  For cargoes, rates range from P0.95 per kilogram to P2.78 per kg on a one-way domestic flight, and from P3.14 per kg to P23.33 per kg on a one-way international flight

Civil Aeronautics Board (CAB) hiked the fuel surcharge airlines may impose in August 2024.

In an advisory dated July 18 signed by CAB executive director Carmelo Arcilla, the agency upgraded to Level 6 the passenger and cargo fuel surcharge during the period from Level 5 in July 2024.

READ: Expect lower airfares in July

Under CAB Resolution No. 25, Level 6 rates for passengers range from P185 to P665 per one-way domestic flight and from P610.37 to P4,538.40 per one-way international flight.

For cargoes, rates range from P0.95 per kilogram (kg) to P2.78 per kg on a one-way domestic flight, and from P3.14 per kg to P23.33 per kg on a one-way international flight.

Airlines seeking to impose a fuel surcharge must submit an application with CAB, with rates capped at Level 6. During the current period, the conversion rate for surcharges in other currencies will be $1 to P58.70.

Resolution No. 25 provides CAB’s amended fuel surcharge policy, which introduced a cargo fuel surcharge matrix to address the impact of volatile jet fuel prices on cargo transported in passenger aircraft belly-holds.

According to the policy, fuel surcharges are to be evaluated monthly, with announcements made 15 days before implementation, replacing the previous two-month assessment cycle.

The surcharge rate is determined based on the one-month average of jet fuel prices (Mean of Platts Singapore) in pesos per liter equivalent, setting the maximum allowable rate. This change is designed to help airlines offset financial losses during periods of rising fuel costs.

Resolution No. 25 recognizes airlines can choose to levy 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.”

If the one-month price average of jet fuel per liter falls below ₱21, no fuel surcharge will be collected. For both passengers and cargo, the surcharge should be applied uniformly for all passengers (except infants without seats) and segments.

In the case of cargo, the surcharge applies only those carried in the aircraft’s cargo hold during combination services and accompanied by an airway bill.

The surcharge is based on the actual weight and does not apply to passengers’ checked baggage.

For international flights originating from the Philippines, the fuel surcharge can be charged in any foreign currency of equivalent value.