Airfares may rise anew

MANILA, Philippines — Airfares may rise again beginning next month as the allowable fuel surcharge level which airlines can impose has gone up by a notch due to the continued increase in prices of jet fuel.

The Civil Aeronautics Board (CAB), in its latest advisory, said the passenger fuel surcharge for domestic and international flights from Sept. 1 to Oct. 31 would go up to Level 2 from Level 1 during the July and August period.

Under Level 2 of the fuel surcharge matrix, airlines are allowed to impose an increase of P45 to P171 for domestic flights, and P218 to P2,076 for international flights.

This is compared to the existing P34 to P132 allowable increase for domestic flights, and P163 to P1,557 for international flights under Level 1.

The fuel surcharge level for the next two months was determined by the CAB based on the average price of jet fuel in June and July.

“For June-July 2021, the price of jet fuel averaged $78.75 per barrel, with the peso-dollar exchange rate of 49.03 for the same period. This is equivalent to P24.29 per liter, which corresponds to Level 2 of the passenger fuel surcharge matrix,” the CAB said.

“Airlines wishing to impose or collect fuel surcharge for the same period must file its application with this office on or before the beginning effectivity period, with fuel surcharge rates not exceeding the above-stated level,” it said.

The CAB last July approved the reimposition of the passenger fuel surcharge following its suspension last year.

The fuel surcharge rate dropped to level zero, which means no fuel surcharge will be imposed, starting May last year as jet fuel prices declined.

In August last year, the CAB decided to suspend “until further notice” the passenger fuel surcharge on domestic and international flights.

The suspension was made as oil prices plunged as the COVID-19 pandemic significantly affected demand.

Local and foreign airlines are allowed to collect fuel surcharge rates that are lower than the stated level for the given two-month period if they choose to do so depending on how they want to compete with other carriers.