PAL's Surcharge

PAL seeks higher fuel surcharge
Inquirer News Service

PHILIPPINE Airlines (PAL) has asked the Civil Aeronautics Board for authority to increase its fuel surcharges on overseas flights.

On flights to the United States and Canada it is asking to raise the surcharge by $12 to $49, to Australia by $12 to $34, to the Middle East by $6 to $19, and on all other foreign destinations, except Guam, by $4 to $15.

"For sure, our profitability will be affected by the no let-up increase in fuel prices," PAL president Jaime Bautista said in an interview. "But we are constantly trying to reduce cost while enhancing the areas where we can sustain profits."

Fuel accounts for 40 percent of an airline's operating cost, and depreciation of the peso further drives the costs of imported fuel higher.

Bautista said the price of jet fuel hovered around $80 a barrel at end-August.

In July PAL raised its fuel surcharge on long-haul flights by $15 but made no change in the surcharge on other flights.

The Civil Aeronautics Board is expected to hear PAL's application for the rise in fuel surcharge in mid-September.

PAL reported a 73-percent increase in net income in the January-March quarter to $27.5 million (roughly P1.5 billion) from $15.92 million in the same period last year.

PAL is in its sixth year of a rehabilitation plan that will end in 2009. With INQ7.net