MANILA, Philippines – Following the directive of the Civil Aeronautics Board (CAB), local carriers Philippine Airlines and Cebu Pacific agreed to remove fuel surcharge from their domestic and international ticket charges.
CAB issued Memorandum Circular No. 01 series of 2015 calling for the lifting of fuel surcharge on international and domestic flights effective Jan. 8.
The government would not hesitate to impose sanctions on domestic and foreign airlines that would continue to impose fuel surcharge on passengers, CAB executive director Carmelo Arcilla earlier warned.
“All fuel surcharge imposition approved by CAB are deemed revoked, hence no fuel surcharge shall be collected from tickets sold from Jan. 8 onwards,” Arcilla said.
All CAB-approved cargo fuel surcharge were also revoked, Arcilla added.
In a statement released Monday, January 12, the Lucio Tan-owned airline would comply with the directive issued by CAB disallowing the imposition of fuel surcharge on airline passengers, PAL president Jaime Bautista said.
“We have carried out the necessary procedural and system adjustments in view of this latest call from [the] government. Rest assured that PAL will always bear in mind the welfare of our customers and the traveling public,” Bautista added.
PAL recently received a directive from the CAB to cease imposing fuel surcharges citing dropping oil prices in the world market.
Cebu Pacific vice president for corporate affairs Jorenz Tanada said the budget airline already removed fuel surcharge in airline tickets since January 9 in compliance with CAB’s directive.
Remove fuel surcharge
On December 22, CAB Issued Resolution No. 79 (BM 10-12-22-2014) lifting the authority of domestic and foreign airlines to impose fuel surcharge on domestic and international flights “with the substantial and continuous decrease of fuel prices in the world market.”
Airlines that would violate the regulation would face sanctions, including fines under Republic Act 776 or the act that reorganized the CAB, Arcilla said.
Domestic and foreign airlines earlier given authority by CAB to impose fuel surcharge include:
- Air Busan
- Air China
- Air Micronesia
- Air Niugini
- AirAsia Berhad
- All Nippon Airlines
- Asiana Airlines
- Cathay Pacific
- China Airlines
- Delta Airlines
- Eva Air
- Gulf Air
- HK Dragon Airlines
- Japan Airlines
- Jeju Air
- Jin Air
- KLM Royal Dutch Airlines
- Korean Air
- Qatar Airways
- Royal Brunei Airlines
- Silk Air
- Singapore Airlines
- Thai Airways
- United Airlines
The surcharge is between P200 ($4.46) and P500 ($11.13) for domestic flights and as high as P15,000 ($333.86) for international destinations.
Fuel costs account for over 50% of the total operating costs of airlines.
The CAB allows airlines to impose such surcharge to help them recover fuel costs and stem losses caused by the sudden upward spikes in fuel prices.
Per prevailing international practice, fuel surcharge may be reduced or removed as it is not part of the basic fare, depending on the price of jet fuel in the world market.
Data from the International Air Transport Association (IATA) showed price of jet fuel in the world market plunged 43.2% to $71.7 per barrel as of Jan. 2 compared to a year ago. – Rappler.com
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