Airfares slashed in time for school break

MANILA, Philippines — Airfares are set to become cheaper in July due to the reduction in fuel surcharge as mandated by the government, clearing the skies for a potential travel boom during the academic break.

In an advisory, the Civil Aeronautics Board (CAB) instructed airlines to slash the fuel surcharge to Level 5 in July, from Level 6 this June, marking the first decline in five months.

As such, low-cost carriers Cebu Pacific and AirAsia Philippines both said that they will comply with the order, optimistic that the decrease in airfares will drive up demand for air travel during the school break.

Under CAB’s matrix, Level 5 corresponds to a fuel surcharge of P151 to P542 for local trips and P498.03 to P3,703.11 for international flights. When compared, Level 6 allows airlines to collect P185 to P665 for domestic routes and P610.37 to P4,538.4 for foreign destinations.

As protocol, CAB asked airlines planning to collect the fuel surcharge to submit an application to the office before July. Likewise, the agency mandated carriers transacting in foreign currency to observe an exchange rate of 58.07 to $1 in imposing the fuel surcharge.

Based on the monitoring of the International Air Transport Association, prices of jet fuel have gone down by 0.5 percent to $99.93 per barrel as of June 14 from a month ago.

Cebu Pacific president and chief commercial officer Alexander Lao said the reduction in the fuel surcharge provides additional relief for Filipinos eyeing to book in July.

“This positive step makes air travel more affordable for our passengers and boosts demand as we enter the third quarter,” Lao told The STAR.

AirAsia Philippines spokesman Steve Dailisan said passengers may expect cheaper airfares from the airline in July. He also committed that AirAsia Philippines will maintain the lowest base fares among domestic carriers.

Airlines, including flag carrier Philippine Airlines (PAL), are hoping for a repeat of their June to August numbers last year in terms of flight bookings. In 2023, PAL observed that travel demand went up between June and August, as students took advantage of the school break to fly somewhere.

However, this trend may no longer hold water in the years to come if the government pursues its plan to revert the academic calendar to the June to April cycle.

For the year, airlines anticipate jet fuel prices to remain elevated for as long as they face supply issues triggered by economic risks and geopolitical tensions.