CAB lowers fuel surcharge level

AS THE PRICE of jet fuel drops, the Civil Aeronautics Board (CAB) has brought down the allowable fuel surcharge level for Jan. 1 to Feb. 28, 2019 to Level 3 from the current Level 4.

“For October to November 2018, the price of jet fuel averaged to $88.20 per barrel, with the USD exchange rate of P53.41 for the same period. This is equivalent to P29.63 per liter, which corresponds to Level 3 of the Passenger Fuel Surcharge Matrix,” CAB said in an advisory on Friday.

Philippine Airlines (PAL) and Cebu Pacific started implementing a Level 3 fuel surcharge in September to help it recoup losses from growing expenses for jet fuel.

The CAB allowed the airlines to implement a Level 4 fuel surcharge for the November to December period. However, the airlines did not implement the additional charge on passengers, citing increased competition.

A Level 3 fuel surcharge is equivalent to an additional P74-P291 on domestic flights, and P381-P3,632 for international flights, depending on distance traveled. Level 4 fuel surcharge brings this up to P108-P411 for domestic flights, and P543-P5,189 for international flights.

Under the approved CAB resolution on passenger fuel surcharges, the government is required to announce the surcharge level every two months based on a two-month average price of jet fuel according to the Mean of Platts Singapore (MOPS). Airlines must then secure an approval from the CAB before it implements the increase. —