Expect lower airfares by the end of the week

ABS-CBN News

Posted at Jan 06 2015 06:41 PM | Updated as of Jan 07 2015 02:41 AM

MANILA – Airline passengers can expect lower airfares soon following the lifting of fuel surcharges on domestic and international flights.

The Civil Aeronautics Board (CAB) has issued Resolution No. 79 (BM 10-12-22-2014) which lifts the authority of domestic and foreign airlines to impose fuel surcharge on their flights.

“With the substantial and continuous decrease of fuel prices in the world market, the Board has deemed it appropriate to compel airlines to discontinue their imposition of fuel surcharge,” CAB said in the resolution.

CAB executive director Carmelo Arcilla said airline passengers can expect lower airfares starting the end of the week with the lifting of the fuel surcharge.

The surcharge, which is based on flight distance, ranges from P200 to P500 for domestic flights and can amount to P15,000 for international destinations. Fuel cost accounts for more than half of airlines’ total operating costs.

Airlines were given the authority to impose the surcharge to recover fuel costs and losses driven by adjustments in fuel prices.

However, surcharge may be reduced or removed depending on jet fuel prices in the global market because it is not part of the basic fare.

According to the International Air Transport Association (IATA), jet fuel prices went down by 42 percent to $75 per barrel as of December 26.

Department of Transportation and Communications undersecretaries Jose Perpetuo Lotilla and Benito Bengzon Jr., Civil Aviation Authority of the Philippines director general William Hotchkiss III, and former Clark International Airport Corp. president Victor Jose Luciano signed the resolution.