Airfares to rise sharply in April as CAB hikes fuel surcharge

DAMPER ON TRAVEL PLANS Airports may be less crowded next month after the Civil Aeronautics Board announced an increase in passenger fuel surcharge effective from April 1 to April 15 in response to surging oil prices. The hike, which will push airfares upward, ranges from P253 to P787 for domestic flights, and between P835 and P6,208 for international flights. —AFP

Travelers booking local or international flights in April will face sharply higher airfares after the Civil Aeronautics Board (CAB) raised the passenger fuel surcharge to Level 8 for the first half of the month, up from Level 4 in March.

The increase, which will more than double current rates, will be implemented under an extraordinary 15-day cycle, which the regulator said is meant to better respond to volatile fuel prices.

“The shorter cycle of 15-days during this extraordinary period of high volatility in fuel prices shall allow faster response to market changes, reducing the lag between actual fuel costs and applicable fuel surcharge,” the CAB said in an advisory dated March 16.

Under Level 8, airlines may impose fuel surcharges ranging from P253 to P787 for domestic flights, up from P117 to P342 under Level 4. These are equivalent to increases of 116 percent to 130 percent, respectively.

For international flights, the surcharge will be from P835.05 to P6,208.98, depending on the distance. This represents roughly a 116-percent increase from the previous range of P385.70 to P2,867.82.

The new rates will apply from April 1 to April 15, based on a conversion rate of P58.11 to the US dollar.

“The more gradual and incremental implementation of fuel surcharge to be collected from passengers can be a way of softening the impact of higher fuel surcharge increases, and enable faster reduction when fuel prices decline,” the CAB said.

Cushioning the impact

Under CAB Resolution No. 25, Series of 2022, fuel surcharges are optional and charged on top of the base airfare. These may be removed if the one-month average price of jet fuel falls below P21 per liter.

The price of crude oil—the primary input for jet fuel—has surged since the outbreak of war in Iran on Feb. 28, with prices fluctuating above $100 per barrel.

Data from the International Air Transport Association showed that jet fuel prices averaged $175 per barrel in the week ending March 13, up 11 percent from $157.41 the previous week and significantly higher than $99.40 before the conflict on Feb. 27.

To help cushion the impact on travelers, President Marcos earlier said the Civil Aviation Authority of the Philippines will reduce passenger service charges, landing fees, parking fees and other related costs.

For its part, the CAB said it will announce the next fuel surcharge level at least three days before implementation, with the 15-day cycle to remain in place “until the current situation stabilizes.”