MANILA – House Deputy Minority Leader Rep. Arnel Ty has called on commercial airlines operating in the Philippines to slash their base fares amid the 40% plunge in jet fuel prices.
He said fuel costs comprise some 50% of an airline’s operating expense. He said air liners are making more money due to the steep drop in jet fuel prices and so they now have greater leeway to reduce base fares.
Ty, also a senior member of the House transportation committee, said this basically implies that if an airline used to spend P1 million to operate a flight, the same flight now costs to only P800,000 to run, assuming all other non-fuel expenses are constant.
He said budget Filipino air travellers, including overseas Filipino workers, deserve to benefit from declining oil prices and cheaper air fares besides scrapping fuel surcharges.
Ty also urged the Civil Aeronautics Board (CAB) to ascertain which airlines have actually abolished their fuel surcharges, ranging from as low as P500 per domestic passenger to as high as P18,000 per international traveller.
“We’ve received complaints that a number of airlines have supposedly decided to scrap their fuel surcharge via instalment, rather than all at once. Other airlines have purportedly removed the surcharge on certain flights, but kept the extra fee on other flights,” Ty said.
The CAB on December 22, 2014 issued Resolution No. 79 which eliminates the authority of domestic and international airlines operating to and from the Philippines to impose fuel surcharges on international and domestic flights.
In the past, the air transportation system regulator permitted carriers to tuck a fuel surcharge into ticket prices to help the industry cope with soaring oil costs. However, as of February 6 this year, global jet fuel prices had plunged by 40% compared to in 2014, to as low as $73 per barrel, according to Platts, the world’s leading energy information provider.
“The problem with airline ticket pricing is the lack of transparency, which the CAB should address to safeguard consumers. In fact, there are also complaints of passengers paying for optional insurance charges they were not aware of,” Ty said, adding, CAB should closely track airline ticket price movements on a weekly basis, and routinely post the changes on the agency’s website, for all consumers to see.
He said CAB should also require airlines to itemize and fully disclose in passenger tickets their base fares and other charges.
“Right now, we’re concerned that a number of airlines may have jacked up their base fares to recover revenues lost owing to the removal of fuel surcharges. This may explain why ticket prices remain elevated,” Ty said. (Mindanao Examiner)
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