Air fares to stay at current levels
Richmond Mercurio (The Philippine Star) - October 17, 2019 - 12:00am

MANILA, Philippines — Passengers will not see any adjustment in their air fares this coming holiday season as fuel surcharge level for the next two months will remain the same.

The Civil Aeronautics Board (CAB) said in its latest advisory that passenger fuel surcharge for domestic and international flights from Nov. 1 to Dec. 31 would stay at Level 2, which is the same for the current September to October period.

“For August to September 2019, the price of jet fuel averaged $77.07 per barrel, with the dollar exchange rate of 52.19 for the same period. This is equivalent to P25.30 per liter, which corresponds to Level 2 of the passenger fuel surcharge matrix,” the CAB said.

Under the Level 2 of the passenger 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.

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

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.

The CAB in September last year decided to allow the reimposition of fuel surcharge on the back of soaring fuel prices.

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. Should the two-month price average of jet fuel per liter falls below P21, then no fuel surcharge will be collected.

The fuel surcharge is a way in which airlines can partially recover losses from the soaring fuel prices and the weakening of the peso against the dollar. Fuel cost accounts for over 50 percent of the total operating costs of airlines.

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