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CAB set to hear pleas to impose fuel surcharge

By Miguel R. Camus | Philippine Daily Inquirer

The Civil Aeronautics Board (CAB) has set a hearing next month to consider applications by some commercial airlines to revive the fuel surcharge.

In an official notice, the CAB set a hearing on July 10, 2018 for applications filed by Philippine Airlines and sister-company Air Philippines Corp. to impose a fuel surcharge. Budget airline Cebu Pacific Air had also made a similar application.

The fuel surcharge is a mechanism that will allow airlines to offset a portion of their fuel costs, which have been going up given the sharp increase in the global price of oil.

The objective was to pass on part of this cost to flyers as the surcharge will reflect in the ticket price.

The practice was scrapped in 2015, when oil prices were on the decline.

The fuel surcharge varies per route. In PAL’s filing, the surcharge for a one-way ticket would add as much as P405 for Luzon to Mindanao flights.

For flights within Visayas, in central Philippines, the charge would amount to an additional P158.

Earlier this month, PAL president Jaime Bautista expressed hope that the CAB would approve its petition to again allow the fuel surcharge.

Doing so, he said, would help PAL post a profit in 2018 after heavy losses the previous year.

PAL posted a comprehensive net loss of $129 million last year, reversing an $86 million profit in 2016.

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