PAL raising fuel surcharge on flights to India

Fuel prices may be starting to go down but the country’s flag carrier continues to feel the squeeze on its margins, forcing it to increase ticket prices for a key international route.

Philippine Airlines is seeking the government’s approval for its plan to increase its fuel surcharge for its service to New Delhi, India, which the company flies to via Bangkok. From the existing $160 per ticket, PAL wants its surcharge adjusted to $175, an increase of 9.4 percent.

The Civil Aeronautics Board (CAB) is scheduled to hold a hearing on PAL’s petition next Monday.

PAL flights to New Delhi were introduced last year but the direct service was halted months later due to weak demand. PAL now flies to New Delhi out of Bangkok, where the airline can pick up more passengers and improve the route’s profitability.

In March, PAL raised its fuel surcharges on most of its domestic and international flights. Fuel surcharges are fees paid on top of basic ticket prices.

The company also recently increased “service” charges for all tickets sold to make up for the rise in various costs such as employee salaries and other operating expenses.

The service charge for the issuance of domestic tickets was increased to P100 (exclusive of value-added taxes, or VAT), while international tickets now carry a $5 service charge (inclusive of VAT).

Likewise, the fee for the issuance of a booking and flight certificate was increased to P200 (exclusive of VAT), while a P50 fee (exclusive of VAT) was added for the issuance of an itinerary receipt.

PAL’s latest income statement showed that fuel cost accounted for about 60 percent of its expenses. It reported a net loss of $33 million for October to December 2011—the third quarter of the company’s fiscal year that ended in March.

This came amid rising fuel costs and a 3.8-percent year-on-year decline in revenue to $386 million.

The International Air Transport Association (Iata) said jet fuel prices had eased to $134.7 per barrel, down 2.6 percent from March and lower by 3.9 percent from last year.