THE Philippine Civil Aeronautics Board (CAB) last week deferred the request of Middle East carrier Emirates to impose a fuel surcharge based on chargeable weight, and asked for a more detailed position on the issue.
Emirates is asking for the change because the Middle East carrier “world-widely decided to shift from actual weight to recover and compensate the incremental loss due to the escalating fuel costs.”
The carrier cited an International Air Transport Association (IATA) resolution allowing airlines to charge freight rates based on chargeable weight or actual weight, whichever is higher.
Actual weight is the gross weight of a cargo while chargeable weight is based on the actual weight and dimensions (length, width, and height) of a package. It must be noted, however, that the IATA resolution only refers to freight rates and not surcharges.
Opposing the Emirates petition is the Aircargo Forwarders of the Philippines Inc. (AFPI), whose legal counsel Atty. Artemio Tuazon, Jr. during the hearing said, “The profitability of the shipment, the cost of carrying the goods, is already carried by the tariff. That’s why the IATA allows you to charge on chargeable or actual weight, whichever is higher.
“The fuel surcharge is a surcharge – it is actually not the cost of freight. It’s very different. It’s only meant to cover fluctuations in fuel cost so we cannot equate the fuel surcharge with the profitability of the shipment… there should be a difference.”
In September 2013, AFPI had sent a letter to CAB saying the basis of fuel burn is the weight of the aircraft and its load, and not its volume. Besides, the association pointed out, the IATA resolution only applied to freight tariff, and not fuel surcharge.
“Fuel burn of an aircraft is affected by weight, not by a virtual volumetric weight. In fact, an aircraft full of less dense cargo will burn far less fuel than one full of denser cargo,” AFPI said.
“As freight forwarders, it would make it difficult for us to explain this utterly illogical change to our customers,” it said. “By imposing a stealth rate rise that customers will also find unjustifiable, we risk the chance of not being able to collect money later on.”
An official from CAB’s hearing and examiners division said the basis for fuel surcharge is actual weight because “that’s what burns fuel and fuel surcharges are supposed to cover the increases in fuel costs”.
Emirates and AFPI were given 10 calendar days to submit their position paper. CAB said it will invite the IATA country manager at the next hearing.
Asked if other airlines are charging fuel surcharge based on chargeable weight, Emirates’ legal counsel said they were not aware of any such arrangement.
But online site loadstar.co.uk said some airlines have been levying fuel and security surcharges based on chargeable weight since the middle of 2013. These airlines include Lufthansa, Air France/KLM, Singapore Airlines, Asiana, Japan Airlines, and Emirates. –– Roumina M. Pablo
Image courtesy of samuiblue / FreeDigitalPhotos.net
