Cebu Pacific says losses incurred from rising fuel cost ‘mounting’

Budget carrier Cebu Pacific on Tuesday said its losses incurred from skyrocketing fuel prices are mounting, and the company hopes that the government will approve the airline’s petition for a fuel surcharge.

The additional cost of fuel is costing the budget carrier a whopping P500 million per month, Cebu Pacific president and CEO Lance Gokongwei said. “They are mounting.”

The price jet fuel has reached $87 per barrel, but the depreciation of the peso to P53:$1 level aggravated the cost of fuel.

“The increase in fuel prices has been rather significant so we applied for fuel surcharges,” Gokongwei said.

Rival Philippine Airlines also filed a petition to impose a fuel surcharge.

The Department of Transportation (DOTr) earlier said it will allow airlines to impose a fuel surcharge to help ease the impact on its business of the rising petroleum prices.

The Civil Aviations Board is now in talks with local carriers on coming up with a fare matrix scheme in relation to fuel surcharges.

“We are long-term partners of the national government so we dialogue ... We are in regular dialogue with them,” Gokongwei noted.

“I think the government is concerned about inflationary effects, so they have to study the petition,” he said.

Cebu Air Inc., the owner and operator of Cebu Pacific, reported its net income declined by 18.9 percent to P7.91 billion in 2017 from P9.75 billion in 2016, largely on higher fuel prices and other operating expense. —VDS, GMA News