No airfare hike; PAL hopes ME conflict temporary

As conflict escalates in the Middle East and fuel prices surge, flag carrier Philippine Airlines (PAL) is holding back on increasing fares and is hoping that the intensified conflict will be short-lived.

- By ANA MARIE PAMINTUAN

"We're hoping that this is temporary," PAL chief operating officer Carlos Luis Fernandez told The STAR last Sunday in this French city that is home to Europe's aerospace industry. "The sooner it gets resolved, the better for everybody."

The Civil Aeronautics Board (CAB) has an automatic mechanism for assessing when airlines can impose a surcharge, for factors such as spiraling prices of aviation fuel.

Even if the CAB approves the collection of a surcharge, however, Fernandez stressed that airfares, unlike most products or services, are not dictated by costs, but by market forces. Other carriers may not see the need to increase fares when fuel prices spike.

“We need to be competitive with other airlines,” he explained. “We can’t price ourselves out of the market.”