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PAL, AirAsia mull over increasing ticket costs amid rising oil prices

Published Jul 21, 2022 11:23 am Updated Jul 21, 2022 11:34 am

Airline firms struggling to cope with the surging cost of jet fuel plan to pass on the latest price hike to passengers to mitigate its impact on their expenses.

Flag carrier Philippine Airlines (PAL) said on Wednesday, July 20, it filed an application for authority to raise its fuel surcharge on passenger tickets to Level 12 as issued by the Civil Aeronautics Board (CAB).

PAL spokesman Cielo Villaluna said the airline owned by taipan Lucio Tan will impose only what the CAB matrix on fuel surcharge allows.

“Fuel surcharge is a tool used by airlines globally to transparently reflect the impact of fuel price volatility. PAL will remain faithful to the CAB matrix on fuel surcharge implementation,” Villaluna said.

Xander Lao, chief commercial officer of budget carrier Cebu Pacific, said the Gokongwei airline has yet to decide on whether it will slap the fuel surcharge in August. The firm has subsidized its airfares to spare passengers of additional costs and, in the process, sustain demand.

“We are still assessing the situation [but] in the meantime, we are encouraging our customers to take advantage of Cebu Pacific seat sales which provide great value to passengers,” Lao said.

Steve Dailisan, spokesman for AirAsia Philippines, said the low-cost carrier also requested CAB to allow it to increase its fuel surcharge, vowing to launch seat sales in exchange for bringing down the cost of flying here and abroad.

“AirAsia understands that this slight movement in the fuel surcharge cost might be of concern to some guests [and] this is why we complement this uptick with regular sale promos, such as the ongoing P77 base fare in select domestic and international routes and the upcoming AirAsia Big Sale happening next week,” Dailisan said.

In an advisory, CAB adjusted the fuel surcharge to Level 12 for August, from Level 11 in July, to reflect the movements in the price of jet fuel. Level 12 translates to a fuel surcharge of P389 to P1,137 for domestic flights and P1,284.4 to P9,550.13 for international flights.

CAB said airline firms eyeing to enforce the fuel surcharge in August must submit its application to the agency on or before the effectivity period.

It reminded them, however, that the applicable conversion rate is P54.34 to $1 in collecting the fuel surcharge from passengers.

Fuel surcharge refers to the optional fee that airline firms impose to recover their oil expenses and minimize financial losses caused by sudden spikes in jet fuel prices.

Fuel surcharge may be reduced or even removed by CAB depending on the price movement of jet fuel in the international market.

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