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The Civil Aeronautics Board approved a Level 19 fuel surcharge that airlines may impose from April 16-30, up from Level 8 imposed in the first half of the month
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The latest range is the second highest level allowed under CAB rules as jet fuel prices have surged due to the Middle East conflict
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Level 19 for passengers range, depending on distance, from P627 to P1,834 per passenger on a domestic flight, and P2,070.77 to P15,397.15 per passenger on an international flight
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For cargoes, Level 19 rates range, depending on distance, from P3.22 per kilogram (kg) to P9.43 per kg on a one-way domestic flight, and from P10.65 per kg to P79.15 per kg on a one-way international flight originating from the Philippines
The Civil Aeronautics Board (CAB) has approved a Level 19 fuel surcharge that airlines may impose from April 16-30, the second highest level allowed under existing rules as jet fuel prices have surged due to the Middle East conflict.
The latest level is higher than the Level 8 imposed from April 1-15.
Under CAB Resolution No. 25 (2022) or the revised fuel surcharge policy, Level 19 for passengers range, depending on distance, from P627 to P1,834 per passenger on a domestic flight, and P2,070.77 to P15,397.15 per passenger on an international flight.
For cargoes, Level 19 rates range, depending on distance, from P3.22 per kilogram (kg) to P9.43 per kg on a one-way domestic flight, and from P10.65 per kg to P79.15 per kg on a one-way international flight originating from the Philippines.
Airlines seeking to collect or impose fuel surcharge for April 16-30 must submit an application with CAB on or before the effectivity period, with rates capped at Level 19, according to an advisory dated April 13 and uploaded in CAB’s website recently.
For fuel surcharge to be collected in equivalent currency, the applicable conversion rate for the period will be $1 to P59.95, higher than the P58.11 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.”
