Civil Aeronautics Board crafting surcharge matrix to aid airlines

THE CIVIL Aeronautics Board (CAB) is looking to implement a surcharge matrix which airlines may follow to allow them to adjust prices based on their spending.

Transportation Undersecretary for Aviation Manuel Antonio L. Tamayo told reporters in Clark on Tuesday that after receiving applications from airlines to impose a fuel surcharge, Transportation Secretary Arthur P. Tugade and economic managers advised the approval of a matrix that takes into account elements that affect airline spending — like fuel prices and infl ation — instead.

“Ang gusto kasi ni Sec. [ Tugade] at saka ng economic managers is to have a template. With this template, if there will be any fluctuations on fuel (price), hindi na kailangang bumalik sa amin for information. I- adjust mo na lang based on the template. Kung tumaas, e di itaas niyo. Kung bumaba, ibaba niyo rin. Kung hindi na kailangan, tatanggalin natin ( Mr. Tugade and the economic managers proposed that we make a template. With a template, airlines no longer need to come to us for information. They may just adjust prices based on the template. If fuel prices rise, hike the surcharge. If it goes down, lower the surcharge. If it’s no longer needed, remove the surcharge),” he said.

Mr. Tamayo noted Philippine Airlines (PAL) already proposed its formula for the matrix last week while Cebu Air, Inc., the operator of low budget carrier Cebu Pacific Air, was set to submit its own on Wednesday. Once the CAB finalizes the template, he said Philippines AirAsia, Inc. no longer needs to present its version.

“Meron nang ginawang matrix ang CAB, kinukuha lang namin yung inputs ng iba. Dapat stakeholders kasi. Kapag nafinalize yan, ang AirAsia hindi na magpe- present sa amin. Kapag na- finalize, ipe- present namin kay Sec. at sa economic managers ( The CAB already has a matrix. We’re just getting the inputs of the stakeholders. When it is finalized, AirAsia doesn’t need to present to us anymore. We will forward the matrix to Mr. Tugade and the economic managers),” he said.

PAL President Jaime J. Bautista told reporters in Pasay City on Tuesday the CAB is now studying their proposed formula, and they expect to have another meeting before the month ends or by early August.

Mr. Tamayo emphasized the importance of allowing airlines to impose surcharges, because he said if not, aviation companies may keep recording losses due to the continuing rise in fuel spending.

“Hindi naman puwedeng malugi sila. Anong mangyayari niyan, magka- cancel sila ng flights sa mga hindi kumikita? Ayaw naman natin yun ( We can’t let them have no profit. What will happen then, let them cancel flights that don’t earn? We don’t want that),” he said.

Recently, PAL and Cebu Pacific had filed applications to the CAB to impose fuel surcharges, noting they are both incurring bigger expenses due to the additional spending. For PAL, Mr. Bautista said its fuel costs went up 36% in 2017 at $200.1 million. Meanwhile, for Cebu Pacific, its President Lance Y. Gokongwei said it is spending an additional P700 million on fuel every month.

Although it has not filed an application yet, AirAsia told BusinessWorld earlier it was also mulling to follow suit with its own surcharge proposal.