Our prayers have been answered and our deepest desires have been heard! The Civil Aeronautics Board (CAB) has announced a decrease in airfare prices starting this March.
What gives with this sudden blessing? Well, jet fuel prices went down last December 2018, and airlines can now cascade the savings down to customers in the form of lower airfares.
According to CAB executive director Carmelo Arcilla, “The average aviation fuel prices for the months of December 2018 to January 2019 was $73.50 per barrel, which is equivalent to P24.32 per liter. This corresponds to Level 2 in our fuel surcharge matrix. This will be effective on March 1.”
What is a fuel surcharge?
A fuel surcharge is a fee that carriers
As per CAB, airlines follow a price matrix that dictated the allowable amount for fuel surcharge. The fuel surcharge would depend on the cost of airline fuel.
Previously, airlines were operating under Level 3 of the fuel surcharge matrix. This meant that airlines were allowed to
Fuel surcharges drop to Level 2 if the
The specific amount of fuel charges that a customer will have to pay will depend on distance for domestic routes and destination for international flights.
While CAB’s price matrix dictates how much a fuel surcharge can cost, imposing the fuel surcharge is left to the discretion of the airline. Currently, it is only AirAsia Philippines that does not apply fuel surcharge in their air fares.
What this means for airline passengers?
2015 saw CAB removing the fuel
In fact, an expert says the Philippine Peso is likely to strengthen to P49:$1 in 2019, a drop that will be caused by, among other things, an oil price decrease of USD 42 per barrel on the first half of 2019.
A jet fuel price drop of P21 per liter will bring the fuel surcharge to a full stop. This means that airline fares will be much cheaper, as what happened in 2015.
So, the next time you book a flight, take a look at the ever-decreasing fuel surcharge