CAB monitors air fares, DTI oversees campaigns

CEBU, Philippines – The Civil Aeronautics Board clarified that it has the power to fix and determine air fares offered by air carriers, as provided by law.

In his letter to the Department of Trade and Industry-Cebu dated August 12, 2015, CAB Executive Director Carmelo Arcilla said that discounted fares -- more known as promotional fares in the aviation industry -- are likewise watched by CAB.

However, Arcilla pointed out CAB's authority over promotional fares” is limited to the content of these promos."

"For instance, if an airline decides to increase or decrease its fares for a particular flight, it must first seek the approval of the CAB," Arcilla explained. "The latter will then review if such increase or decrease is in accordance with existing regulations."

CAB does not regulate the manner on how these promos are done, the official said.

Republic Act 776 gives the board the power "to fix and determine reasonable, joint or special rates, charges or fares, which an air carrier may demand, collect or receive for any service in connection with air commerce."

Moreover, RA 7394 or the Consumer Act of the Philippines requires any person to secure DTI permit before doing any sales promo campaign.

Any promo done in connection with the distribution of promotional airline tickets is not within CAB's jurisdiction, the director explained.

Arcilla, however, explained that as far as the content of discounted fares is concerned, a CAB permit is required. But for the raffle of airplane tickets and redemption of travel vouchers, DTI is the more appropriate agency to regulate them, he added.

CAB's clarification on the matter came after DTI-Cebu endorsed a query from foreign carrier SilkAir to the board on whether a DTI permit is required for discounted fares, redemption of travel vouchers and raffle of air tickets.

CAB, an attached agency of the Department of Transportation and Communications, is mandated to regulate the economic aspect of air transportation.