Airline operators Cebu Pacific Air and Philippine Airlines have filed an application for an increase in fuel surcharge. This petition translates to affected ticket prices. The price hike will not only have an impact on travellers but on goods that require air transport as well.
Fuel surcharge
Due to the volatile fuel costs, the Civil Aeronautics Board (CAB) grants airlines fuel surcharge. The surcharge helps airline carriers to recover losses. It also aids in minimising the company’s most significant operating expense.
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This year, the Philippine Peso has hit its lowest level in 12 years. The price of oil continues to rise as well. The problem with the weakening currency and oil price is a dangerous combination for the top two airline carriers in the Philippines.
Cebu Pacific Air President and Chief Executive Lance Gokongwei confirmed this after the stockholder’s meeting of JG Summit Holdings on Monday this week. The company is trying to become more efficient. However, the need to offset the losses and an increase in fuel surcharge will be necessary to reduce the damage.
Budget airline Cebu Pacific Air seeks to increase fuel surcharge from ₱70 to ₱250 for domestic flights. Unfortunately, this is the lowest possible amount they could negotiate. Lance Gokongwei said that it would only recover about half of the additional cost the company is currently facing. Cebu Pacific Air is also suffering from loss of revenue after the Boracay closure on 26 April 2018.
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Waiting game
Jaime Bautista, President of Philippine Airlines, said that the application has been with the Civil Aeronautics Board for three months already. However, there’s still no response and action until now.
