Expect cheaper airfares in Jan with fuel surcharge downgrade

• Airfares may be lower next year as the Civil Aeronautics Board downgraded the level of passenger and cargo fuel surcharge for January 2024

• The Board has set to Level 6 the surcharge from Level 7 imposed since November

• 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 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

Airfares are expected to drop in January as the Civil Aeronautics Board (CAB) downgraded the level of passenger and cargo fuel surcharge for that month.

In an advisory dated December 19, CAB, through executive director Carmelo Arcilla, announced the downgrade to Level 6 from Level 7 imposed since November.

READ: Airfares seen steady in Dec with fuel surcharge unchanged

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 (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 in January must submit an application with CAB, with rates capped at Level 6. The conversion rate for surcharges in other currencies during this period will be $1 to ₱55.60.

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 will now 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 opt 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.”

If the one-month price average of jet fuel per liter falls below ₱21, no fuel surcharge will be collected.

The surcharge should be uniformly applied to all passengers (excluding infants without seats) and segments for both passengers and cargo.

In the case of cargo, it applies only to cargo carried in the aircraft’s cargo hold during combination services and must have 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. – Roumina Pablo