Airfares going down next month

MANILA, Philippines —  Travelers will enter the holiday season with good news, as airfares will be reduced in September following the government’s order to slash the fuel surcharge passed on to consumers.

In an advisory, the Civil Aeronautics Board (CAB) ordered carriers to trim the fuel surcharge to Level 5 in September, from Level 6 this August, lowering the cost of air travel.

At Level 5, airlines can slap a fuel surcharge of P151 to P542 for domestic flights and P498.03 to P2,867.82 for international trips.

These rates are lower than the current level passed on by airlines to their passengers. At Level 6, carriers can place a fuel surcharge of P185 to P665 for local flights and P610.37 to P4,538.4 for foreign trips.

As part of protocol, CAB ordered airlines planning to apply the fuel surcharge to submit an application to the agency before September. Further, CAB set the conversion rate at P58.29 to $1 for carriers transacting in foreign currencies.

CAB decided to decrease the fuel surcharge to reflect the recent reduction in petroleum prices as reported by the International Air Transport Association.

Based on IATA’s monitor, jet fuel prices have fallen on a monthly basis by six percent to $95.91 per barrel as of Aug. 16.

Domestic carriers, particularly Cebu Pacific and Philippine Airlines (PAL), expect a second half surge in travel frequency, as Filipinos tend to travel during the All Saints’ Day and Christmas seasons.

So far, the air travel market has reached new highs since the pandemic, with domestic passenger traffic up by eight percent to 15.77 million as of June, from 14.56 million a year ago. Moreover, international passenger volume grew by more than half to 13.75 million, from 8.93 million.

Cebu Pacific, including its regional unit Cebgo, flew over half of the domestic passenger count at 8.14 million, with PAL right behind with 4.68 million. AirAsia Philippines landed third with 2.6 million, while the rest is shared by boutique carriers flying mostly to island destinations.

PAL led domestic carriers in serving the demand for international flights, flying 2.94 million, while Cebu Pacific follows closely with 2.74 million.

For the year, Cebu Pacific eyes to fly a record 24 million passengers, lifted by the opening of new routes, while PAL aims for a passenger growth of 10 to 20 percent from 14.68 million in 2023.