Domestic air fares up P300; international rates $6 higher

Transportation and Communications Secretary Pantaleon Alvarez said domestic air fares will increase by P300 and international air fares by $6 beginning tomorrow because of increased insurance costs.

"This is only temporary," Alvarez told the Cypress Forum at the Tree House Restaurant in Quezon City yesterday. "My understanding is that this will be lifted once the gloomy situation in the world airlines industry clears."

Alvarez explained that the terrorist attacks on Washington DC and New York have caused a drop in passenger traffic worldwide and insurance premiums on commercial aircraft have also increased.

To aggravate the situation, local insurance firms have also unilaterally imposed a P50 million limit on third-party liability insurance coverage for airlines, Alvarez said.

"We are in an abnormal situation where passenger rates are dropping because of fears of terror attacks using civilian airliners as missile," he said.

"We need to restore the confidence of the riding public in the fact that airliners still provide the safest and the most convenient mode of travel," the DOTC chief added.

Alvarez reiterated that authorities have set in place tighter security measures to prevent terrorist attacks from happening here.

He said security officials are studying proposals to tighten security in the cockpit, saying the passage leading to it in most, if not all, commercial aircraft is not designed to hold intruders at bay.

"You can actually kick the doors open. Manufacturers are being asked to devise ways to make the cockpit more secure," he said.

Alvarez, however, expressed opposition to proposals to arm pilots. "That should be thoroughly studied because an airplane is a high-pressurized environment and any gunfire endangers the lives of passengers," he said.

Cebu Pacific Air said the increase in premiums for third party liability insurance related to war or terrorists acts is being applied by all airlines worldwide.

"No airline can take the risk of operating with inadequate insurance," said Peggy Vera, Cebu Pacific VP for corporate planning and external affairs. "So we took the coverage. We are now constrained to impose a P300 surcharge.

Vera emphasized that the additional amount is not a fare increase, but rather a surcharge for the increased insurance premiums. This will be paid upon purchase of tickets starting Oct. 1 for any fare type including discounted tickets. Passengers traveling on a complimentary basis will also be subject to the surcharge.

Passengers who bought tickets Oct. 1 onwards and were not charged the additional three hundred will pay this at the airport.

"We feel for the customers," Vera said. "We realize that this is an additional burden. But the circumstances are beyond anyone’s control. We’re just hoping that the flying public would understand the prevailing situation."

Meanwhile, Air Philippines announced it would push through with its maiden international flight to Brunei on Nov. 3 despite the unstable situation in the country.

The airline has supposedly been operating at a loss because of the successive fuel price increases and a slowdown in tourist arrivals. It has also applied with the CAB for an 11 to 14 percent fare increase on top the P300 and $6 insurance surcharge it was asking.