Air passenger traffic in the Philippines remained relatively stable at more than 32 million in the first half of the year, as higher airfares and route suspensions eased demand for air travel.

Data from the Civil Aeronautics Board (CAB) showed that total passenger volume reached 32.65 million from January to June, a mere one-percent increase from 32.25 million in the same period last year.

The increase in passenger traffic was driven largely by demand for international travel, which rose by nearly three percent to 15.27 million from 14.87 million a year ago.

CAB said foreign airlines accounted for 51 percent of international passenger volume, or 7.86 million passengers, while the remaining 7.41 million were handled by local carriers.

Meanwhile, domestic travel in the first six months remained relatively steady at 17.38 million, as airlines were forced to cut certain routes to cope with the impact of higher fuel costs.

Since the latest war in the Middle East erupted in February, jet fuel prices have gone well beyond last year’s average of less than $100 per barrel.

At one point in April, fuel prices exceeded $200 per barrel, prompting a dramatic increase in the passenger fuel surcharge to a record Level 19.

Under Level 19, passengers paid as much as ₱1,834 for local routes and up to ₱15,397.15 for the farthest international destination.

CAB, which oversees the economic aspect of air travel in the country, allows carriers to impose fuel surcharges to help them recover and offset financial losses caused by the surge in fuel prices.

The fuel surcharge is not part of the basic airfare and may be adjusted depending on prevailing jet fuel prices. Essentially, the higher the jet fuel price, the costlier the surcharge and airfare become.

Low-cost carrier Cebu Pacific reported that expenses related to flying operations increased by half to ₱30.88 billion in the first half, mainly due to higher jet fuel prices. Likewise, flag carrier Philippine Airlines (PAL) said flying expenses went up by 39 percent to ₱59.49 billion.

This resulted in a net loss of ₱5.87 billion for Cebu Pacific, while PAL incurred ₱1.84 billion in losses.

CAB data showed that Cebu Pacific, which has the largest fleet in the country, accommodated the largest number of domestic and international passengers in the first half.

Cebu Pacific, together with its regional subsidiary Cebgo and boutique carrier AirSwift, carried a total of 13.59 million passengers by the end of June.

PAL and its low-cost unit PAL Express handled 8.20 million passengers, while budget carrier AirAsia Philippines ranked third with a total of 2.90 million passengers.

Amid higher fuel prices in the first half, there is some optimism to be had in the second half of the year as jet fuel prices continue to decline amid slowly improving conditions in the Middle East.

At present, CAB is allowing airlines to impose and collect a fuel surcharge at Level 12 from Aug. 16 to 31. Under this level, the highest additional fee for domestic flights is ₱1,137, while the fee for international destinations is ₱9,550.13.

Furthermore, carriers have also announced that they are resuming services on previously suspended routes in anticipation of increased demand during the holiday season, in addition to launching new offerings.

New foreign carriers are also exploring the launch of direct services to the Philippines, including India’s largest airline, IndiGo, which earlier requested an air service permit from CAB.

The country’s passenger traffic rose to a record 62.34 million last year, signaling the aviation sector’s return to a growth trajectory after the pandemic.