-
The Civil Aeronautics Board is allowing airlines to charge higher fuel surcharge in Jan-Feb due to increased jet fuel prices have increased
-
Surcharge ranges from P74 to P291 per passenger on a domestic flight (one way) and from P381 to P4,165 per passenger on an international flight (one way)
Airlines may charge higher passenger fuel surcharge from January to February 2022 following a rise in jet fuel prices.
In an advisory dated December 20, the Civil Aeronautics Board (CAB) upgraded to Level 3 the passenger fuel surcharge that carriers may charge. CAB executive director Carmelo Arcilla said that from October to November 2021, the price of jet fuel averaged US$94.29 per barrel, equivalent to P29.98 per liter at an exchange rate of P50.65 per dollar. This latest rate falls within Level 3 of the passenger fuel surcharge matrix for domestic and international flights under CAB Resolution No. 46.
Level 3 rates range from P74 to P291 per passenger on a domestic flight (one way) and from P381 to P4,165 per passenger on an international flight (one way).
CAB in July 2021 announced the reimposition of fuel surcharge following increases in jet fuel price. The fuel surcharge was officially suspended in August 2020, but had not been imposed since May 2020 due to lower jet fuel price. Prior to this, the fuel surcharge was suspended in 2015 and reimposed in 2018 upon the request of airlines.
Resolution No. 46 states that the applicable fuel surcharge should be determined based on the two-month average of jet fuel Mean of Platts Singapore (the average of a set of Singapore-based oil product price assessments published by Platts) priced in its peso-per-liter equivalent, and will be fixed for two months.
The two-month price average will be the ceiling rate for the fuel surcharge.
The applicable fuel surcharge will be evaluated every two months and announced 15 days prior to its effectivity, in accordance with the timetable in Resolution No. 46.
If the two-month price average of jet fuel per liter falls below P21, no fuel surcharge will be collected.
Resolution 46 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 adds.
Airlines wishing to impose or collect fuel surcharge from January to February 2022 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 $1 is to P50.56.
