Airfare promotions usually spark outrage because of the added fees tacked on what is advertised. Sure, these seat sales may seem like a marketing ploy, but recent developments in air passenger rights have made them more transparent. With the disclosure airlines now provide, the next good move is to understand what these fees are about. Read more…
Photo credit: Wikimedia Commons
With the advent of e-ticketing and internet bookings, fare computations are now more easy to understand. More or less, the following fees and charges can be found on a typical ticket:
1. Fare, also commonly called base fare, is the part of the ticket dictated by the airline that considers several factors, including class of travel, restrictions, season, availability, demand, competition, and promotions. Airlines use specific algorithms that take these into account when coming up with an amount, and because of air deregulation here in the Philippines, airlines have a free hand in determining their fares.
2. Fuel surcharge (YQ) considers the supply, demand, and price of fuel in the world market, as well as foreign exchange rates. Airlines that impose a fuel surcharge tacks a specific amount per route or region, and should they decide to introduce an increase, they must apply and justify first with the Civil Aeronautics Board.
3. Passenger service charge (PSC), also known as terminal or airport fee, goes directly to the airport for the use of its services, including the passenger terminal, customs, immigration, and quarantine. Not all airports include their terminal fees into the ticket, so a passenger may pay this fee separately. In the Philippines, airports in Manila and Cebu include their charge to domestic tickets, and Manila will start to include this charge to international soon.
4. Aviation security fee (ASF) pays for the baggage scanners, the metal detectors, the CCTVs, and costs related to securing the airport and the passengers.
5. Processing fee, also known as web admin fee (WAFI) for Cebu Pacific Air, covers the use of the airline’s web booking system and/or the fees involved with payments (e.g. credit card, direct debit, or payment centers). This is the electronic version of a ticketing service charge (TSC) incurred when coursing a reservation through a travel agent or telephone.
6. Optional fees are prevalent in this age of low-cost carriers. Usual add-ons include baggage, meals, insurance, seat selection, sports equipment allowance, and merchandise.
7. Value added tax (VAT) is a 12% Philippine government-mandated addition to the fees above, but it only applies to domestic flights, meaning international flights are excluded. Other countries may likewise impose a similar tax towards domestic flights (e.g. Thailand).
SAMPLE FARE CALCULATIONS
AirAsia Zest and Philippines Airasia
Domestic (Manila to Cebu) International (Manila to Kota Kinabalu)
Cebu Pacific Air and Tigerair Philippines
Domestic (Clark to Kalibo) International (Manila to Narita)
Philippine Airlines and PAL Express
Domestic (Bacolod to Manila)
International (Manila to Bangkok)
CEBU PACIFIC AIR PISO FARE COMPUTATION
Often, people cannot wrap their heads around why a “piso fare” ends up costing them a lot. Technically speaking, by “piso fare,” airlines mean that the base fare is one peso, and it is the taxes and fees described above that cost more. To illustrate, here are sample computations of “piso fare” from Cebu Pacific Air and Tigerair Philippines:
Domestic (One Way)
Manila to Legaspi Manila to Cebu Manila to Davao
Base Fare 1.00 1.00 1.00
Fuel Surcharge 350.00 400.00 500.00
Passenger Service Charge 165.18 165.18 165.18
Aviation Security Fee 15.00 15.00 15.00
Web Admin Fee 120.00 120.00 120.00
Value Added Tax 76.34 82.34 94.34
Total 727.52 783.52 895.52
Legaspi to Manila Cebu to Manila Davao to Manila
Base Fare 1.00 1.00 1.00
Fuel Surcharge 350.00 400.00 500.00
Passenger Service Charge 0.00 165.18 0.00
Aviation Security Fee 15.00 15.00 15.00
Web Admin Fee 120.00 120.00 120.00
Value Added Tax 58.32 84.14 76.32
Total 542.52 785.32 712.32
Domestic (Roundtrip)
Manila to Legaspi Manila to Cebu Manila to Davao
Base Fare 2.00 2.00 2.00
Fuel Surcharge 700.00 800.00 1000.00
Passenger Service Charge 165.18 330.36 165.18
Aviation Security Fee 30.00 30.00 30.00
Web Admin Fee 240.00 240.00 240.00
Value Added Tax 132.86 164.68 168.86
Total 1270.04 1567.04 1606.04
International (One Way)
Manila to Singapore Manila to Hong Kong Manila to Tokyo
Base Fare 1.00 1.00 1.00
Fuel Surcharge 1775.79 1299.36 2382.16
Passenger Service Charge 0.00 0.00 0.00
Aviation Security Fee 0.00 0.00 0.00
Web Admin Fee 120.00 120.00 120.00
Value Added Tax 0.00 0.00 0.00
Total 1896.79 1320.36 2503.16
International (Roundtrip)
Manila to Singapore Manila to Hong Kong Manila to Tokyo
Base Fare 2.00 2.00 2.00
Fuel Surcharge 3550.58 2598.72 4764.32
Passenger Service Charge 695.18 670.56 888.28
Aviation Security Fee 279.47 251.46 221.01
Web Admin Fee 240.00 240.00 240.00
Aviation Levy (Singapore) 213.10 0.00 0.00
Total 4980.33 3762.74 6115.61
Note: All fare computations above are in Philippine pesos (PHP) and are accurate as of August 2014. Prices may differ slightly for international flights because of foreign exchange fluctuations.