Air fares to rise in Sept with surcharges adjusted up

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Air fares to rise in Sept with surcharges adjusted up
File photo of Ninoy Aquino International Airport Terminal 3 by PortCalls.
September airfares may rise as the Civil Aeronautics Board upgrades the passenger and cargo fuel surcharges next month
• CAB has raised the passenger and cargo fuel surcharges for September 1-30 to Level 6 from Level 4
• 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, Level 6 rates are from P0.95 per kilogram to P2.78 on a one-way domestic flight, and from P3.14 per kg to P23.33 on a one-way international flight

Air fares may increase in September as the Civil Aeronautics Board (CAB) upgrades the passenger and cargo fuel surcharge for that month.

In an advisory dated August 16 and signed by officer-in-charge Maria Elben Moro, CAB upgraded the passenger and cargo fuel surcharges for September 1-30 to Level 6 on the fuel surcharge matrix under CAB Resolution No. 25. This is an upgrade from Level 4 that has been consecutively imposed since June 2023.

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, Level 6 rates range from P0.95 per kilogram to P2.78 on a one-way domestic flight, and from P3.14 per kg to P23.33 on a one-way international flight.

Airlines wishing to impose or collect fuel surcharge for September must file their application with CAB on or before the effectivity period, with fuel surcharge rates not exceeding the stated level. For fuel surcharge to be collected in the equivalent currency, the applicable conversion rate for the period is P54.97 to $1.

CAB Resolution No. 25 provides revised policy on fuel surcharges, which now includes a matrix for cargo. The fuel surcharge matrix ranges from Level 0 to 20.

Resolution No. 25 revises Resolution No. 46 (passenger fuel surcharge for domestic and international flights adopted in June 2021), which was reviewed and evaluated by CAB in light of the continuous escalation of jet fuel prices in the global market, and the foreign exchange rate.

CAB said the review showed fuel surcharges can only be applicable to passengers, which is one component in a combination service (passenger and cargo operations).

Resolution No. 25 said a cargo fuel surcharge matrix may be provided given the volatility of jet fuel prices also affects cargo operations as a component of combination service where cargo is carried in the belly-hold capacity of a passenger aircraft.

Under the policy, the applicable fuel surcharge will be determined based on a one-month average of jet fuel Mean of Platts Singapore prices in its peso per liter equivalent, and will be fixed for immediately succeeding month. This will be the ceiling rate for fuel surcharge.

The applicable fuel surcharge will be evaluated every month and will be announced 15 days prior to its effectivity. Previously, the applicable fuel surcharge was determined based on a two-month average and implemented for two months.

Resolution No. 25 notes that airline fuel surcharge is an optional fee that airlines may impose and collect to recover fuel costs and stem losses caused by a spike in fuel cost.

“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,” the resolution said.

If the one-month price average of jet fuel per liter falls below P21, no fuel surcharge will be collected.

For cargoes, the fuel surcharge should be applicable only to cargo carried in the cargo hold of an aircraft used for combination services. Such cargo must be covered by an airway bill.

Cargo fuel surcharge should be collected based on the actual weight (as opposed to chargeable weight) carried per segment. Cargo fuel surcharge should not be levied on a passenger’s check-in baggage.

For international flights originating in the Philippines, the fuel surcharge may be imposed in any equivalent foreign currency.

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