PAL seeks hike in fuel surcharge

Philippine Daily Inquirer
December 8, 2009
By Paolo Montecillo


FLAG CARRIER PHILIPPINE Airlines (PAL) plans to raise air fares to key Asian destinations as a way to cope with rising fuel costs.

PAL has sought a regulatory nod to hike its fuel surcharge, passenger pay on top of published ticket rates, for flights between Manila and Japan, Korea and Taiwan.

?PAL has filed with the Civil Aeronautics Board (CAB) a petition for authority to impose an upward adjustment of fuel surcharge on its international operations,? documents at the regulator showed.

The fuel surcharge for flights to Taiwan will be hiked to $12 per person from the current $9.

Japan tickets, meanwhile, will have a surcharge of $39 each, from the previous $37. Tickets to Korea will have a similar $2 adjustment to $34 from $32 Tuesday.

Data from the International Air Transport Association shows the price of jet fuel at $84 per barrel as of the end of last month. This is 14 percent higher than the cost of fuel in the same period last year.

Oil costs make up more than a third of PAL?s total expenses.

Flights to the three Asian destinations are among PAL?s busiest, with the airline flying eight times weekly to Taiwan.

In Korea, PAL flies twice a week to Pusan and twice a day to Seoul for a total of 16 weekly flights.

Meanwhile, PAL has five weekly flights to Fukuoka in Japan, once a day to both Nagoya and Tokyo via Narita for a total of 26 flights a week to Japan from Manila.

PAL also has six weekly flights to Tokyo from Cebu.

Despite losing its lead in the domestic arena to rival Gokongwei-led Cebu Pacific, PAL still holds the distinction as the country?s leading airline with its international operations unmatched by any other local carrier.

The CAB will hold a hearing regarding PAL?s petition on Dec. 16.

Government data showed that in the first six months of the year, PAL carried more than 1.7 million passengers in and out of the country. This is more than double the 797,523 million passengers its rival Cebu Pacific ferried in the same period.

PAL posted an $18.6-million net loss in the April-September period?the first half of the airline?s fiscal year. This is much lower than the $113 million in losses the airline incurred a year earlier.