Airlines raising fares ahead of summer break

Air fare in the Philippines is set to get more expensive as carriers hike fuel surcharges to try to compensate for the unabated rise in oil prices.

Documents from the Civil Aeronautics Board (CAB) showed that Zest Airways and AirPhil Express were the latest of the country’s airlines to seek permission to hike plane fares to account for higher fuel prices.

Zest Airways said it would hike surcharges, which are paid on top of basic plane fares, by P100 to most domestic routes this summer.

For flights between Manila and Legazpi, Marinduque, Masbate, San Jose, Tabias, Virac and Busuanga, surcharges would increase to P350 per passenger.

For flights from Manila to Puerto Princesa, Bacolod, Calbayog, Catarman, Cebu, Iloilo, Kalibo, Tacloban and Tagbilaran, surcharges would rise to P400 per passenger.

Surcharges for flights to Davao and Cagayan de Oro, meanwhile, would remain at P400.

The CAB is set to hear the petition for the adjustments before the end of March.

Likewise, the CAB said AirPhil Express had applied for the right to increase its own surcharges for flights from Clark and Manila to other points in Luzon to P300 from P250.

The company is also seeking a P100-hike in surcharges for Visayas and Mindanao flights to P400 and P500, respectively.

The company is also looking at increasing charges for inter-Visayas and inter-Mindanao flights by P50 each to P300 and P350, respectively.

Earlier this year, both Cebu Pacific and flag carrier Philippine Airlines (PAL) have raised their own fuel surcharges ahead of the peak holiday season as oil prices neared historic highs.

Foreign airlines operating in the Philippines that have also applied for fuel surcharge adjustments include Hong Kong’s Cathay Pacific and Hong Kong Dragon; Singapore’s SilkAir; and Australia’s Qantas and Jetstar.

Data from the International Air Transport Association (IATA) showed that the price of jet fuel reached $139.5 per barrel on March 9. This was 4.3 percent up month on month and 5.4 percent up year on year.

Despite rising fares, the government projects that air travel in the country would grow at a double-digit rate this year, outpacing the rest of the world.

Last year, air travel grew by about 12 percent over 2010. This is due mainly to cheap fares that are a result of stiff competition between industry players.

Last year’s growth was nearly double the 6-percent hike in global passenger traffic recorded last year, data from IATA showed.

The country’s growth was also faster than the rest of the Asia-Pacific region, which expanded by just 8 percent.

Air travel is seen as a key component to the Aquino administration’s plan to triple the number of tourists visiting the country to 10 million annually by 2016.

However, rising fuel prices, which eat up household disposable incomes and lead to higher ticket prices, threaten to temper tourism growth.