Cebu Pacific resumes fuel surcharge for local flights
NINE days after Cebu Air Inc., operator of Cebu Pacific airlines, resumed collecting fuel surcharge for international destinations, the low-cost carrier also imposed the same to ticket holders traveling within the country.
A P50-fuel surcharge for Luzon to Luzon, Visayas to Visayas, and Mindanao to Mindanao destinations is now being collected by Cebu Pacific. Luzon to Visayas and Visayas to Mindanao routes now carry a P100-fuel surcharge while passengers traveling from Luzon to Mindanao have to pay a P200-fuel surcharge.
The imposition of fuel surcharge for domestic routes started on March 23 and on March 14 for international destinations.
It has been two years since the Gokongwei-owned airline removed fuel surcharge in the ticket price of its domestic and international flight bookings.
But the rising price of fuel in the world market is hurting airlines. Fuel accounts for 40 percent of an airline’s operating cost per passenger and is considered the second-highest next to labor that is why airlines are allowed to seek for upward adjustment in fuel surcharges before the Civil Aeronautics Board as a temporary relief from the higher jet fuel prices.
“We have to augment due to rising fuel costs,” said Cebu Pacific vice president for marketing and distribution Candice Iyog in a text message.
Cebu Pacific, however, claims it its ticket price remains the lowest in the industry. “We still have the lowest fares even with fuel surcharge since all other airlines are also charging the same fuel surcharge,” added Iyog.
The political unrest in the Middle East and North Africa sent crude oil prices skyrocketing to nearly $120 per barrel in late February, the highest in two and a half years.
Airlines seeking adjustment in fuel surcharge will have to pay P6,000 per application before the CAB. Once approved by the CAB, the airlines are allowed to implement the new rate for the next three months.
Rival Philippine Airlines (PAL) sought in January the CAB go-ahead to impose an increase in fuel surcharge. PAL president Jaime Bautista had said the latest round of fuel surcharge was approved last month.
Airlines hedge their fuel requirements. This means that they buy their fuel requirements at almost 60 percent in advance at a fixed price.
Cebu Pacific and PAL admitted that spiraling fuel prices will hurt their bottom line.
“There is an impact but we are managing it,” said Iyog.