BUDGET carrier Cebu Pacific said it is closely reviewing its pricing strategy as escalating tensions in the Middle East push jet fuel prices sharply higher, though the airline stressed that any fare adjustments will depend on how the situation evolves.
Cebu Pacific officials said the spike in global oil prices has already begun affecting airline operating costs, with jet fuel prices nearly doubling in recent days.
Before the crisis escalated, benchmark crude prices were around $60 per barrel but have since surged to about $110. Jet fuel, which carries additional refining costs, has climbed even more steeply, reaching around $180 to $200 per barrel from roughly $80 to $85 previously, according to Alexander Lao, president and chief commercial officer of Cebu Pacific.
“This clearly will have a material impact in terms of pricing because ultimately airlines, like many transport companies, will have to pass some of these higher fuel costs to consumers,” said Lao.
Cebu Pacific executives led by Lao and chief marketing and customer care officer Candice Iyog were in Cebu to meet with tourism and business leaders, including presidents of different business chambers in Cebu, the Hotel, Resort and Restaurant Association of Cebu, and the Cebu Alliance of Tour Specialists, as the airline marks its 30th anniversary and strengthens ties with stakeholders in one of its largest hubs.
Fare adjustments
not immediate
Despite the pressure, Lao said any fare adjustments will not be immediate, noting that pricing remains highly dynamic and dependent on market demand.
“If we price it too much, people may not purchase,” he said, adding that the company is carefully balancing cost recovery with its low-fare
strategy.
Iyog said the airline continues to monitor fuel prices and geopolitical developments closely, conducting periodic reviews of its operations and network to determine whether adjustments are necessary.
Iyog noted that Cebu Pacific’s exposure to the Middle East remains limited compared with other carriers, with routes primarily to Dubai and Riyadh. Flights to Riyadh, which launched only recently, were temporarily canceled for safety reasons following the escalation of tensions.
Lao also pointed to the airline’s structural advantages that could cushion the impact of rising fuel costs. More than 70 percent of its jet fleet now consists of fuel-efficient aircraft equipped with new engine option technology, which burns 15 to 20 percent less fuel.
In addition, Lao said its strong domestic network provides a stable demand base in the Philippines, where air travel remains essential due to the country’s archipelagic geography.
Iyog said the airline will continue offering promotional fares — including its signature piso sales — for now as part of its strategy to stimulate travel demand.
“As much as we can, we will keep fares low because our value proposition has always been about affordable travel,” Iyog said.
However, she emphasized that the airline will conduct weekly reviews of market conditions, fuel costs, and route performance to determine whether operational or pricing adjustments will be necessary.
“With such a fluid environment, we need to remain agile — hoping for the best but preparing for the worst,” Lao said.
Meanwhile, AirAsia Philippines said it is also closely monitoring the situation.
“AirAsia Philippines acknowledges the potential impact of rising fuel prices amid ongoing tensions in the Middle East. The airline is carefully evaluating the potential effects on our overall cost structure and will continue to assess appropriate measures moving forward,” the carrier said in a statement. / KOC