Cebu Air Inc., the airline unit of conglomerate JG Summit Holdings Inc., said it sought the government’s approval to implement a fuel surcharge for domestic flights ranging from P70 to P250 per passenger to recover from the recent fuel price spike.
JG Summit president and chief executive Lance Gokongwei said in an interview during the annual stockholders’ meeting the sharp increase in fuel prices and the depreciation of the peso against the US dollar pushed the airline’s cost higher by P700 million a month.
“The effect of the fuel price and currency has been quite significant for us. The effect of fuel, approximately P20 million per month for every dollar increase, and the effect of currency is about P65 million per month because of the weaker peso,” Gokongwei said.
“In aggregate, it is costing us P700 million more per month to fly the same route. So we will have to avoid losses and we will really have to become more efficient. Likewise, we have applied for fuel/fare surcharge increase with the CAB,” he said.
Gokongwei said Cebu Air’s pending petition would enable it to recover half of the increased cost. Fuel prices have risen since the start of the year.