Air fares to go up starting July

MANILA, Philippines — Passengers will see higher air fares starting next month following an adjustment in the fuel surcharge matrix.

In its latest advisory, the Civil Aeronautics Board (CAB) said the passenger fuel surcharge for domestic and international flights from July 1 to Aug. 31 would rise to level 3 from level 2 during the May to June period.

“For April to May 2019, the price of jet fuel averaged $82.96 per barrel, with the US dollar exchange rate of 52.19 for the same period. This is equivalent to P27.24 per liter, which corresponds to level 3 of the passenger fuel surcharge matrix,” the CAB said.

Airlines are allowed to impose an increase of P74 to P291 for domestic passengers, and P381 to P3,632 for international passengers under level 3 of the fuel surcharge matrix.

CAB said airlines wishing to impose or collect fuel surcharge for the July to August period must file their application on or before the beginning of the effectivity period, with fuel surcharge rates not exceeding the stated level.

It has adopted a matrix for fuel surcharge that will be determined based on the two-month average of jet fuel MOPS (Mean of Platts Singapore) prices in its peso per liter equivalent and will be fixed for two months.

No fuel surcharge will be collected should the two-month price average of jet fuel per liter fall below P21.

The fuel surcharge is a way in which airlines can partially recover losses from the soaring fuel prices and the weakening of the peso over the dollar. 

Fuel cost accounts for over 50 percent of the total operating costs of airlines. 

Both 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.