Cebu Pacific to raise fares for some routes
MANILA, Philippines - Budget carrier Cebu Air Inc. (Cebu Pacific) is set to increase fares for certain international and domestic routes. This as rising price of aviation jet fuel has taken a toll on Cebu Pacific's bottomline.
The airline is seeking the Civil Aeronautics Board's approval to raise the fuel surcharge imposed on passengers of 7 international routes and 4 domestic routes.
Cebu Pacific wants to impose an 8% increase in fuel surcharge to $54 for passengers of Manila to Incheon, Manila to Busan, Cebu to Incheon, and Cebu to Busan flights.
The airline also plans to raise the fuel surcharge on passengers of Manila to Shanghai flights by 48% to $37; Manila to Beijing flights by 43% to $50; Manila to Guangzhou flights by 40% to $35; Manila to Xiamen flights by 30% to $26; and Manila to Siem Reap flights by 20% to $30.
As for domestic routes, the fuel surcharge is expected to increase by as much as 25%. Cebu Pacific is asking for a 12.5% increase in fuel surcharge for its Manila to Pagadian flights (to P450), a 17% increase for its Cebu to Clark (to P350), a 20% increase for its Cebu to Cagayan de Oro flights (to P300), and a 25% increase of its Cebu to Bacolod flights (to P250).
Meanwhile, Cebu Pacific is slashing the fuel surcharge on Manila to Dipolog flights by 11% to P400 and the Manila to Zamboanga flights by 25% to P300.
The CAB allows airlines to impose fuel surcharge on international and domestic passengers as a temporary relief to help them recover losses arising from the increase in jet fuel prices in the world market.
The Gokongwei carrier saw a 18% decline in net income in its first half net income to P1.414 billion, due to foreign exchange losses at the end of the second quarter.
A report by COL Financial noted that around 50% of Cebu Pacific's costs are dollar-denominated, mostly fuel expenses.
"Due to the weakness of the Philippine Peso recently, Cebu Pacific booked P1.4 billion in foreign exchange losses. According to CEB, every P1.00 depreciation of the peso would result to a P45 million increase in monthly expenses," COL Financial said.