PAL increases fares in 8 routes

The Philippine Airlines has obtained the government’s approval to raise its fare in its eight regional routes including Bangkok, Singapore and Hong Kong amid the rising cost of jet fuel.

The flag carrier will raise its fuel surcharge from $35 to $42 on Manila–Bangkok flights effective Aug. 15 until Nov. 14.

“PAL is constrained to increase its fuel surcharge to enable it to partially recover the steady increase in the cost of fuel,” the airline told the Civil Aeronautics Board.

The Lucio Tan-owned airline said it was incurring “under-recovery” of fuel cost amounting to $6.36 per passenger in its Manila-Bangkok route.

It was also allowed to extend until October 12 fuel surcharges it raised from July 13 on its flights to Singapore ($29), Indonesia ($44), Hong Kong ($25), Macau ($19), Xianmen ($24), Shanghai ($44) and Beijing ($44).

For domestic flights, PAL charges P500 to P700 for fuel surcharge.

A fuel surcharge is added to each airline ticket to offset increases in jet fuel prices, which in turn make up an airline’s highest expense after labor, accounting for more than a third of its operating cost per passenger.

PAL said it was spending as much as $30 billion a year on jet fuel.

The carrier is locked in a dispute with a group of pilots and in-flight crew over issues ranging from salary to retirement age to benefits. Its ground employees are also restive over its plan to spin off three non-core units.

PAL has reduced its domestic flights after the resignation of 26 pilots operating its Airbuses.

Meanwhile, foreign carriers Thai Airways and Malaysia Airlines were also allowed to increase their fuel surcharges.

Only Cathay Pacific and Hong Kong Dragon Airlines are bucking the trend and are cutting fuel surcharge.

Fuel surcharges will be as follows: Thai Airways’ Manila-Bangkok and Manila-Osaka services, $43; Malaysian Airlines’ Manila-Malaysia service, $30; Dragonair’s Manila-Hong Kong, $64.70; and Cathay Pacific’s Manila-Hong Kong service, $64.70.

Data from the International Air Transport Association showed that the price of jet fuel rose 4.3 percent to $92.40 a barrel on August 6 from a week ago.

The average price of jet fuel so far this year stood at $88.3 a barrel, and that increased the international airlines’ fuel bill by $17 billion.

Jet fuel was most expensive in Latin and Central America at $95.6 a barrel and cheapest in the Middle East and Africa at $90.20 a barrel.

Jet fuel prices in Asia stood at $92.80 a barrel on August 6, up 12.5 percent from a year ago.

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