Airline fuel surcharge stays high at Level 18 for May 1-15

THE Civil Aeronautics Board (CAB) set the passenger fuel surcharge at Level 18 for May 1-15, down one notch from Level 19 in the previous period, following a slight decline in monitored jet fuel prices.

In an advisory dated April 27 and released on Tuesday, the CAB adjusted the surcharge for the first 15 days of May from the Level 19 rate implemented for April 16-30.

At Level 18, fuel surcharges range from P593 to P1,734 for domestic flights and from P1,958.44 to P14,561.87 for international flights, depending on distance.

Fuel surcharges are variable fees added to base fares to offset changes in jet fuel costs and are adjusted based on movements in jet fuel prices using the Mean of Platts Singapore benchmark.

The Level 18 surcharge remains among the highest imposed, just two levels below the allowable cap at Level 20.

The highest surcharge so far was Level 19, implemented from April 1 to 15, according to the agency.

Based on the CAB’s fuel surcharge matrix, passengers booking flights for the May 1-15 period will pay P1,958.44 for flights between the Philippines and Taiwan, Hong Kong, Vietnam, Cambodia, and Brunei. Flights between Manila and Singapore, Thailand, Malaysia, and Guam will carry a surcharge of P2,708.56.

For routes between the Philippines and North America, the United Kingdom, and the Netherlands, fuel surcharges reach P13,868.44. For flights exceeding 14,000 kilometers from the Philippines, surcharges can go up to P14,561.87.

In April, the CAB shifted from a monthly review of fuel surcharges to a 15-day monitoring cycle to respond more quickly to fuel price movements following the war in the Middle East.

CAB Executive Director Carmelo L. Arcilla said the measure will remain in effect until the situation stabilizes, unless revised or revoked.

The equivalent exchange rate is set at P60 to the dollar for airlines collecting fuel surcharges in foreign currency, the CAB said.

According to monitoring by the International Air Transport Association (IATA), jet fuel prices fell week on week to $179.46 per barrel as of April 24. On a yearly basis, however, jet fuel prices have nearly doubled, rising 99.3%.

Separately, the CAB said that if fuel prices decline further, the surcharge may be adjusted downward under the shortened monitoring period.

Jet fuel is one of the largest components of airline operating expenses, the CAB said, adding that maintaining a stable aviation sector requires supporting the financial sustainability of air carriers.

Cebu Pacific Chief Executive Officer Michael B. Szücs said the industry’s current challenge is not supply constraints, but the sharp increase in jet fuel prices.

According to the CAB, jet fuel prices averaged $208 per barrel from March 10 to April 8, a steep increase from about $89 per barrel in January.

Based on data from the Department of Energy, the country’s average daily jet fuel demand is 5.65 million liters, with available supply estimated to last about 70 days. — Ashley Erika O. Jose