By Denise A. Valdez
PHILIPPINE Airlines (PAL) is now seeking a higher fuel surcharge, after the cost of jet fuel continued to rise since it filed its initial application with the Civil Aeronautics Board (CAB) in December.
In a press conference on Thursday, PAL President and COO Jaime J. Bautista said the flag carrier’s first petition had sought to impose a fuel surcharge of between P51 to P207. He noted the figures have to be updated considering the price of fuel has gone up by $13 from January to April.”
Mr. Bautista said the carrier consumes 11 million barrels of fuel very year. “That would mean $143-million additional cost to Philippine Airlines. This is one of the reasons why we are urging government to allow us to collect the fuel surcharge,” he said.
He noted that company’s fuel costs increased by 36% in 2017, which cost PAL $200.1 million. “This is one of the reasons why we did not perform well in 2017; because we were not able to pass on to our passengers the total increase in fuel charges,” he said.
PAL Holdings, Inc., the listed operator of PAL, reported a P7.3-billion net loss in 2017, due to higher fuel prices and ballooning aircraft and passenger expenses.
For the first quarter, PAL Holdings saw a net loss of P1.1 billion, mainly due to higher jet fuel prices. Fuel and oil expenses accounted for the biggest share of PAL’s first quarter expenses at P11.746 billion, up by P2.1 billion from the same period last year.
Mr. Bautista said the weakening of the Philippine peso is also taking its toll on the company, as every P1 depreciation against the US dollar leads to a $3-million loss every year.
In the event that CAB does not give the go-signal for the fuel surcharge, PAL is preparing contingency measures, one of which is the acquisition of “more efficient” aircraft. Mr. Bautista said the airline has bought Airbus 350 and Airbus 321 NEO planes which are more fuel-efficient.
Earlier this week, Cebu Pacific President and CEO Lance Y. Gokongwei said the budget carrier also applied for a fuel surcharge of between P70 to P250 for domestic flights, adding the rising fuel prices is costing the company a P700-million increase in expenses every month.
