Airlines plan fuel-surcharge rate hike

by Lorenz S. Marasigan, BusinessMirror

Posted at Jun 13 2014 09:10 AM | Updated as of Jun 13 2014 05:10 PM

MANILA - Several airlines are poised to hike their passenger ticket prices as they seek to impose fuel surcharge on their local and international flight operations.

Filings at the Civil Aeronautics Board (CAB) showed that Tigerair Philippines, Cebu Pacific, Magnum Air (operator of SkyJetAir) and Air Busan have individually asked the air services regulator to be allowed to add fuel charges on ticket prices to recover jet fuel costs.

Tigerair Philippines sought for the regulator’s approval of a P500 fuel surcharge for its Manila-Cagayan de Oro route, while parent firm Cebu Pacific requested for a P300 fee for the Cebu-Tandag (Surigao del Sur) operations.

New industry player SkyJetAir asked the government agency to allow it to impose fuel surcharge on flights from Manila to Basco (P2,940), Busuanga (P1,960) and Caticlan (P2,613).

Air Busan, meanwhile, filed for an upward adjustment of its current $55 fuel fee to $60 per sector between the Cebu and South Korea.

A fuel surcharge is a temporary relief granted to airlines to help them recover losses incurred from higher jet fuel prices. Fuel accounts for as much as 60 percent of an airline’s operating cost per passenger, and is the second-highest expense, next to labor.

Data from the International Air Transport Association showed jet fuel cost was at $284.5 per gallon as of June 6, down by 2.2 percent from the preceding month but 2.2 percent more than the year-ago price.