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Philippine Airlines seeks to bring back fuel surcharge

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PHILSTAR

PHILIPPINE AIRLINES (PAL) is seeking the government’s go-signal to impose a fuel surcharge on its tickets to recover costs from the sharp rise in oil prices.

PAL President Jaime J. Bautista said the flag carrier filed a petition with the Civil Aeronautics Board (CAB) in December, and hopes it will be granted this year.

“We have filed a petition for fuel surcharge, it’s being acted by the CAB,” Mr. Bautista told reporters on Feb. 13.

He did not disclose the amount, but noted the company is spending more than $80 per barrel of fuel.

“It’s not very high, just to allow us to recover a portion of the additional costs of fuel,” Mr. Bautista said of the fuel surcharge requested.

The PAL chief noted jet fuel prices have steadily gone up since 2016. For airlines, fuel is the one of the biggest operating expenses.

Mr. Bautista said PAL flight tickets sold out of Hong Kong and the United States, for example, have fuel surcharge, as other carriers in those countries charge an additional fee for fuel costs.

PAL Holdings, Inc., the listed operator of the flag carrier, recorded P3.47-billion net loss attributable to parent in the January to September period last year, with fuel costs adding on to expenses of the company.

The company is also expecting further losses as it paid P6 billion of dues to the government last year.

Aviation intelligence services firm Centre for Asia Pacific Aviation earlier said airfares are poised to increase globally this year due to rising oil prices.

PAL is expecting the delivery this year of four Airbus A350-900s, six A321neos, and five Bombardier Q400s, cumulatively worth $2 billion, as it aims to secure a five-star rating by 2020.

It is also in ongoing talks with a strategic investor which may get a minority stake in the airline. — Patrizia Paola C. Marcelo