The increase in fuel surcharges for domestic and international flights from October 1 is expected to have an impact on travel demand, particularly for international and longhaul trips, according to Philippine travel industry players.
The Philippines’ Civil Aeronautics Board (CAB) has raised the allowable fuel surcharge to Level 17 for October 1 to 15, from Level 14 during the second half of September. Airlines may impose surcharges ranging from 559 pesos (US$9) to 1,635 pesos for domestic flights and 1,846.10 pesos to 13,726.58 pesos for international flights, one way per passenger, depending on distance. The applicable exchange rate is 62.71 pesos to US$1.
Level 20 is the highest under the CAB’s fuel surcharge matrix. The agency is currently reviewing passenger and cargo fuel surcharges every 15 days based on changes in aviation fuel prices.
Marlene Insigne, general manager of Chase Wonder Travel Atelier, said: “Fewer people will likely travel while those who had initially planned trips may choose to postpone or reconsider their travel plans. The impact will be more pronounced on longer routes, where the additional surcharge can substantially increase the overall cost of the trip”.
Corporate travel and MICE are also being affected.
Insigne cited a Japan-based international organisation that regularly sponsors seminars and workshops in Asia and Europe, which has had to reduce the number of sponsored delegates and workshops.
“The organisation is also considering concentrating more of their (events) within Asia, as travel to Europe and other longer haul destinations has become significantly more expensive due to the combination of higher airfares and fuel surcharges.”
Rising fuel surcharges have become a concern for the travel industry amid higher aviation fuel prices, at a time when Philippine tourism is also facing slower growth and other challenges.
Jojo Clemente, who heads Rajah Tour, said in a Facebook post: “Sometimes I wonder if all the effort we put into tourism is still worth it with these kinds of developments. It’s always an uphill battle for one reason or another with no help or assistance to be expected.”
