Airlines ask government: Waive airport fees as peso weakens

As the Philippine peso weakens, major airlines are urging airport operators to waive terminal fees to help alleviate costs. The Air Carriers Association of the Philippines (ACAP) is appealing to Transport Secretary Vince Dizon to reduce charges at major airports like Ninoy Aquino International Airport (NAIA). ACAP executive director Jose Enrique Perez de Tagle stated that airlines are struggling to survive amid higher jet fuel prices and a weakening peso.

The peso recently dropped to its weakest value ever, crossing 64 per dollar. Airlines face challenges as the currency they receive from bookings is now worth less, impacting costs for aircraft repair, jet fuel, and spare parts. Jet fuel prices doubled since early February, following geopolitical tensions in the Middle East. ACAP, representing Cebu Pacific, Philippine Airlines (PAL), and AirAsia Philippines, is seeking relief from airport fees for both airlines and passengers.

For instance, passenger service charges at NAIA have risen from P550 to P950 for international travelers and from P200 to P390 for domestic flyers. Cebu Pacific President and Chief Commercial Officer Alexander Lao highlighted that the company pays 70% of its costs in dollars while earning 70% of revenue locally, making it particularly vulnerable to the peso's weakness.

PAL's COO, Carlos Luis Fernandez, noted that the airline is somewhat protected due to its dollar-based pricing, as fuel surcharges cover higher costs. However, airlines have faced increasing aircraft handling fees, with Cebu Pacific and PAL experiencing losses of P5.91 billion and P1.84 billion, respectively, in the first half of the year.

Air traffic grew by only one percent to 32.7 million passengers, slightly below the nine percent increase in the same period last year.