Measures eyed to help airlines, shipping firms as fuel prices rise – BusinessWorld Online

MACTAN, Cebu — The Transportation department is preparing measures to help airlines and shipping firms cope with the continued spike in fuel prices.

Transportation Secretary Arthur P. Tugade opposed the airlines’ collection of higher fuel surcharges, which will drive up airfares at a time when the travel industry is still recovering from the pandemic.

“As much as possible, let’s avoid the fuel surcharge… The cost will be passed on to passengers. The cost of travel will go up. My position is that we maintain the cost of travel — no increase. Let’s study this carefully,” he told reporters at the Mactan-Cebu Airport.

The Civil Aeronautics Board (CAB), which is chaired by Mr. Tugade, raised the passenger fuel surcharge for domestic and international flights to Level 4 in March and April, from Level 3 in January and February, due to the increase in jet fuel prices.

Under Level 4, fuel surcharge rates per passenger for domestic flights range from P108 to P411.

Instead of allowing airlines to impose a fuel surcharge, Mr. Tugade said airport fees for airlines should be waived.

In a separate interview, Civil Aviation Authority of the Philippines Chief of Staff Danjun G. Lucas said aeronautical fees are still waived until December.

Philippine Airlines President and Chief Operating Officer Capt. Stanley K. Ng recently said that the flag carrier was “working with the CAB to put some fuel surcharge for the fares.” “However, we’ll make sure that it’s still going to be reasonable for passengers to fly,” he told reporters.

At the same time, Mr. Tugade said the department is looking at providing subsidies for shipping firms to offset the impact of higher fuel prices on their operations.

“We will take a look at how to lessen the operational costs of shipowners,” he told reporters at the Mactan-Cebu International Airport, when asked about the assistance being extended to the domestic shipping companies.

Mr. Tugade met with the department’s maritime sector officials on Monday to discuss the matter.

Mr. Tugade said Philippine Ports Authority (PPA) General Manager Jay Daniel R. Santiago was directed to urge the PPA board to continue waiving the port terminal fee for another two to three months.

Philippine Interisland Shipping Association Executive Director Pedro G. Aguilar said during a recent House committee hearing on the fuel crisis that the shipping companies need a “substantial” reduction in the fees and charges imposed by the regulatory agencies such as the PPA.

AIRPORTS
Fitch Solutions Country Risk & Industry Research on Tuesday said the Philippines is still among the leading markets in the region in terms of airport development projects.

“Asia hosts over $220 billion worth of airport infrastructure projects,” the think tank said, citing its Infrastructure Key Projects Data. “South Korea accounts for the largest share in Asia, with $46.1 billion worth of airport infrastructure projects, ahead of the Philippines at $33.9 billion and Vietnam at $23.3 billion.”

“We note that this is also a notable shift from the top three largest markets from what our data captured just over a year ago – which were the Philippines, South Korea and China respectively,” it added.

Fitch Solutions noted that there are medium- to long-term opportunities in the region because majority of the airport projects are “currently at the pre-construction phase.”

However, it cited near-term uncertainties arising from the pandemic and “the possibility of re-assessing business cases for some airport infrastructure developments due to disruptions in air travel.”

In the Philippines, Mr. Tugade said the construction of San Miguel Corp.’s airport project in Bulacan is “ongoing.” He added that the Tuguegarao Airport Development Project will also be completed soon.

“To date, the physical accomplishment of the project now stands at 98%, and is targeted to be finished within the last 94 days of the Duterte Administration,” the DoTr said in a statement. — Arjay L. Balinbin