Airline Fuel Surcharge Eases to Level 16, Remains Above September Levels
Key Takeaways
- •The Civil Aeronautics Board lowered the passenger fuel surcharge to Level 16 for Oct. 16-31, one notch below the Level 17 applied during Oct. -15.
- •Level 16 permits airlines to collect between P525 and P1,535 on domestic routes and between P1,733.76 and P12,891.29 on international routes, depending on distance.
- •Despite the reduction, the surcharge remains above the Level 14 in effect during the second half of September, while April's Level 19 was the highest this year.
- •The CAB switched from a monthly to a 15-day review cycle amid fuel-price volatility after the Middle East conflict, with the next review covering Nov. 1-15.
- •Global jet fuel prices rose 1.5% week on week to $190.18 per barrel as of Oct. 9, according to the International Air Transport Association.
THE Civil Aeronautics Board (CAB) has set the passenger fuel surcharge at Level 16 for Oct. 16-31, easing by one notch from the rate applied in the first half of the month but still standing above the levels imposed in September.
Under Level 16, airlines may collect fuel surcharges ranging from P525 to P1,535 on domestic flights and from P1,733.76 to P12,891.29 on international flights, depending on route distance. Because these fees sit on top of base fares, the level in effect shapes the total price passengers pay on routes where carriers choose to apply the surcharge.
The new rate follows the Level 17 surcharge in effect for Oct. 1-15, when the fees ranged from P559 to P1,635 for domestic routes and from P1,846.10 to P13,726.58 for international routes.
Even with the adjustment, the surcharge remains above Level 14, which applied during the second half of September. The CAB earlier implemented Level 19 for April 16-30, the highest level imposed so far this year and one notch below the maximum allowable Level 20.
Fuel surcharges are additional fees that airlines may collect on top of base fares to offset fluctuations in jet fuel costs. The CAB determines the applicable surcharge level based on movements in jet fuel prices, using the Mean of Platts Singapore benchmark.
The regulator shifted from a monthly review to a 15-day cycle amid volatility in global fuel prices following the conflict in the Middle East. The interim review cycle will remain in place until market conditions stabilize or until the CAB revises or revokes the policy. Under that cadence, the next review will set the level for Nov. 1-15, the next checkpoint for travelers and carriers tracking fee movements.
Airlines seeking to impose the surcharge must file an application with the CAB before the applicable period. For carriers collecting the fees in foreign currency, the board set the applicable conversion rate at P62.65 per US dollar.
According to the International Air Transport Association, global jet fuel prices rose by 1.5% week on week to $190.18 per barrel as of Oct. 9, a sign that the jet fuel price movements behind the surcharge levels are still in motion heading into the next review. — Ashley Erika O. Jose
