The Civil Aeronautics Board (CAB) has approved a higher passenger fuel surcharge ceiling of Level 17 for the Nov. 1–15 travel window, lifting the cap by one level from the second half of October and potentially raising air travel costs for passengers on both domestic and international routes.

Under Level 17, airlines may collect fuel surcharges ranging from P559 to P1,635 for a one-way domestic flight and from P1,846.10 to P13,726.58 for a one-way international flight, depending on the destination. That compares with Level 16, in effect from Oct. 16 to 31, which allowed surcharges of P525 to P1,535 for domestic flights and P1,733.76 to P12,891.29 for international flights.

For airlines collecting the surcharge in foreign currencies, the applicable exchange rate for the first half of November is P63.01 per dollar, according to the CAB.

The adjustment marks the second time this year that Level 17 has been imposed, following its implementation from Oct. 1 to 15. The highest surcharge level this year was Level 19, in effect from April 16 to 30, followed by Level 18 from May 1 to 15.

Fuel surcharges are additional fees that airlines may collect on top of base fares to recover part of their jet fuel expenses. Because the charges sit on top of base fares, the ceiling a carrier follows can affect a passenger's total ticket cost even when the base fare itself is unchanged. Carriers are not required to charge the maximum amount allowed under the CAB's surcharge matrix, so the amounts actually collected can vary by airline and route.

The regulator determines the applicable surcharge level based on movements in jet fuel prices, using the Mean of Platts Singapore benchmark, a widely referenced pricing basis for jet fuel in the Asian market. Amid volatility in global fuel prices following the conflict in the Middle East, the CAB shifted from a monthly review to a 15-day cycle, meaning the ceiling can now be adjusted twice a month. The interim arrangement will remain in effect until market conditions stabilize or the regulator revises or withdraws the policy.

Based on the CAB's indicative rates, airlines may collect P2,553.19 in fuel surcharges for one-way flights to Singapore, Thailand, and Malaysia. The surcharge may reach P2,871.83 for flights to Indonesia, Japan, and South Korea, while some North American routes may carry a surcharge of P13,072.93 for a one-way flight.

Meanwhile, global jet fuel prices rose by 2.2% week on week to $196.70 per barrel as of Oct. 23, according to the International Air Transport Association (IATA). The latest price was also 118.5% higher than a year earlier, based on IATA data. The CAB's next review under the 15-day cycle will set the surcharge ceiling for the second half of November.

Reporting by Ashley Erika O. Jose for BusinessWorld. Original article