CAB allows airlines to continue collecting surcharge on jet fuel

The Civil Aeronautics Board allowed local and international airlines to continue collecting fuel surcharge on jet fuel prices for March and April travel period.

“For December 2019 to January 2020, the price of jet fuel averaged $76.86 per barrel, with the US dollar exchange rate of P50.80 for the same period. This is equivalent to P24.56 per liter, which corresponds to level 2 of the passenger fuel surcharge matrix,” CAB said in an advisory. 

This means airlines are allowed to collect P45 to P171 for domestic flights and P218 to P2,076 for international flights under the level 2 of passenger fuel surcharge matrix for March 1 to April 30, 2020. 

A level 2 surcharge was also allowed by the CAB for the months of November to December.

“Airlines wishing to impose or collect fuel surcharge for the same period must file their application with this office on or before the beginning of the effectivity period, with fuel surcharge rates not exceeding the stated level,” the aviation regulator said.

The CAB said airline fuel surcharge was an optional fee, imposed and collected by airlines to recover fuel costs and stem losses caused by an upward spike in fuel cost. 

It said the fuel surcharge was not a part of the basic airfare and might be reduced or removed depending on the price of jet fuel in the market, in accordance with prevailing international practice. 

Jet fuel cost is the largest expense by an airline operator and as a global practice, airlines “due to competition prefer to charge fuel surcharge separately rather than increase fares when fuel prices surge,” it said.

The agency said infants without seats would remain exempt from the fuel surcharge.

The CAB suspended the imposition of fuel surcharge in all domestic and international flights in 2015 because of lower jet fuel prices but decided to implement it again last year, as prices surged.

Topics: Civil Aeronautics Board , CAB , jet fuel surcharge
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