• Airfares are likely to fall in May following a further downgrade of the jet fuel surcharge for passengers and cargoes
• The fuel surcharge for May 1-31 will be at Level 5, says the Civil Aeronautics Board
• Surcharge rates for passengers range from P151 to P542 per one-way domestic flight, and P418.03 to P3,703.11 for one-way international flight
• Cargo surcharge ranges from P0.77 to P2.27 per kilogram for one-way domestic flight and from P2.56 to P19.04 per kg for one-way international flight
Airfares may drop in May 2023 as the Civil Aeronautics Board (CAB) further downgrades the fuel surcharge for passengers and cargoes.
In an advisory dated April 17, CAB executive director Carmelo Arcilla said the fuel surcharge for May 1-31 will be at Level 5 of the fuel surcharge matrix under CAB Resolution No. 25. This is a downgrade from Level 6 in April and Level 7 in March.
Under CAB Resolution No. 25, Level 5 rates for passengers range from P151 to P542 per one-way domestic flight, and P418.03 to P3,703.11 per one-way international flight.
For cargoes, Level 5 rates range from P0.77 to P2.27 per kilogram (kg) for one-way domestic flight, and from P2.56 to P19.04 per kg per one-way international flight.
Airlines wishing to impose or collect fuel surcharge for April must file their applications 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 P54.65 to $1.
CAB in May 2022 adopted CAB Resolution No. 25, which provides the revised policy on fuel surcharges that 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 this year 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 were made only applicable to passengers, which is one component in a combination service of passenger and cargo operation.
Resolution No. 25 said a cargo fuel surcharge matrix may be provided given that the volatility of jet fuel prices also affects cargo operations as a component of a combination service wherein 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 the immediately succeeding month. This will be the ceiling rate for fuel surcharge.
The applicable fuel surcharge will be evaluated every month and announced 15 days before it takes effect. 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 prices.
“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.
The passenger fuel surcharge level in effect on the day of ticketing should be applied and be the same for all passengers, excepts infants without seats. The applicable surcharge should be collected per passenger and per segment.
For cargo, the fuel surcharge should be applicable only to freight carried in the cargo hold of an aircraft in 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.
