PAL considers fuel surcharge on tickets

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Metro Manila (CNN Philippines, February 14) — Philippine Airlines (PAL) has asked the government for permission to impose a fuel surcharge on its tickets to offset the sharp increase in oil prices in recent years, its top official said.

PAL President Jaime Bautista told reporters on Tuesday it filed a petition with the Civil Aeronautics Board in December to levy the surcharge, though he declined to state the amount.

"The price of fuel has gone up compared with 2016, but fares have stayed the same, if not gotten even lower. Of course that would mean additional costs for PAL," Bautista said.

Fuel is one of the largest operating expenses of an airline and prices have gone up steadily since January 2016.

Back then, a barrel of Dubai crude cost about $26 (around ₱1,350). The price has more than doubled to $66 (around ₱3,400) a barrel today.

In 2017 alone, Bautista estimated that PAL spent $200 million (around ₱10.4 billion) more on fuel than the year prior.

"That's the reason why we wanted to ask government to allow us to collect a fuel surcharge," he said.

Aviation authorities last allowed domestic and international carriers to collect a fuel surcharge in 2011 when oil prices breached the $100 (around ₱5,200) mark per barrel. The surcharge was suspended in 2015 when fuel prices started dropping.

According to Bautista, the CAB has already held several hearings on PAL's current petition, but there are no deadlines for the decision to come out.

"We are hoping it will be within the year," he said.

The PAL chief also assured travellers the surcharge would not create a significant increase in airfare.

"The surcharge is not really by much since we cannot price ourselves out of the market where fares are still low," Bautista said. "But a small fuel surcharge will help us financially."