Philippine travel: Cheaper airfares seen in September on lower fuel surcharge

Manila: Airfares are expected to drop this September as the Philippine's aviation regulator has cut the fuel surcharge by around 26%, the government announced Thursday.

Currently, the fuel surcharge cap per passenger runs between Php389 and Php1,137 for domestic flights and Php1,284.40 and Php9,550.13 for international flights.

From September 1 fuel surcharge for domestic flights will be reduced to a range of Php287 to Php839 per passenger (depending on flight distance), a reduction of about 26%.

For international flights, it will be reduced to a range of Php947.39 to Php7,044.27 per passenger (also depending on flight distance).

The Civil Aeronautics Board (CAB) regulates the amount of fuel surcharge airlines are allowed to collect from passengers, based on tiered rates that track aviation fuel prices. The reduction is from Level 12 to Level 9.

The board will revise applicable passenger and cargo fuel surcharge for both domestic and interantional flights.

The price of jet fuel averaged Php46.73 per liter, and this corresponds to level 9 of the passenger and cargo fuel surcharge matrix, the board stated, citing data that from July 10 to August 9.

Airlines' reaction

Airlines welcomed the move.

"This is a welcome development. We look forward to the lower fuel surcharge which should help make fares more affordable and stimulate air travel," Cebu Pacific chief commercial officer Xander Lao told the Philippine News Agency on Tuesday.

The CAB stated that airlines wishing to impose or collect fuel surcharge for the same period must file their application with the Office of the Executive Director on or before the effectivity period.

The board's directive means that the fuel surcharge rates are not allowed to exceed that of Level 9. The CAB added when fuel surcharge is collected in foreign currency, the applicable conversion rate is US$1 = Php55.93.