Airfare surcharge to drop anew by June 16
MANILA, Philippines – Travelers flying within and out of the Philippines can expect further relief in airfare prices starting June 16 after the Civil Aeronautics Board (CAB) again lowered the fuel surcharge that airlines may impose to account for fluctuations in fuel prices.
In an advisory on Thursday, the CAB said that the fuel surcharge will be set to Level 12 until June 3, down from Level 13 in the first half of June and well below the record-high Level 19 imposed from April 16 to April 30.
READ: Airline fuel surcharge to ease further in June
Under Level 12, airlines may collect a fuel surcharge ranging from P389 to P1,137 for domestic flights, roughly 8-percent lower than the P423 to P1,237 allowed during the previous 15-day period.
A similar reduction will apply to international flights, with fuel surcharges falling to between P1,284.40 and P9,550.13 from P1,396.74 to P10,385.42.
The new rates will take effect using a conversion rate of P61.62 to the US dollar.
While higher fuel surcharges did not significantly dent passenger traffic during the first quarter, Philippine carriers have begun seeing signs of softer demand as fares climbed alongside fuel costs.
Cebu Pacific, the country’s largest carrier, said in May that passenger demand had weakened in April as higher fares and fuel surcharges took effect amid rising oil prices linked to tensions in the Middle East.
“While these were initially absorbed by the market, we subsequently saw signs of demand softening, reflected in slower booking momentum and weaker April load factors,” Cebu Pacific president and chief commercial officer Xander Lao had said.
Despite the latest reduction, fuel surcharges remain elevated compared with the Level 4 observed before the Middle East conflict drove oil prices higher earlier this year.
READ: US renews attacks on Iran, vows to hit ‘hard’
Under Level 4, airlines were allowed to collect fuel surcharges ranging from P117 to P342 for domestic flights and from P385.70 to P2,867.82 for international routes.
Under CAB Resolution No. 25, Series of 2022, fuel surcharges are charges collected on top of the base airfare. These may be removed entirely if the one-month average price of jet fuel falls below P21 per liter.
The latest reduction comes as jet fuel prices have eased from their recent peaks.
Jet fuel averaged $146.25 per barrel in the week ending June 5, up slightly from $141.64 per barrel a week earlier but still far below the more than $200-per-barrel levels recorded in April, according to data from the International Air Transport Association.
However, uncertainty remains in the oil market after Iran announced on Thursday that it had “completely closed” the Strait of Hormuz, the crucial shipping route through which roughly a fifth of the world’s oil supply passes. INQ
