DOTr sees no need for new flight fee

MANILA, Philippines — The Department of Transportation (DOTr) is not keen on approving the airline industry’s proposal to collect a new fee that would mitigate the impact of rising costs at the Ninoy Aquino International Airport (NAIA).

Transportation Secretary Jaime Bautista yesterday confirmed that domestic carriers are applying for a terminal enhancement fee that would be slapped on travelers flying to and from NAIA.

However, Bautista said the Civil Aeronautics Board (CAB) is reluctant to approve the proposal, wondering why airlines have to introduce a new fee and not just increase fares.

Bautista, a former airline executive himself, said carriers can pass on the additional costs to their passengers by raising the base fare for flights in NAIA. He compared this to the industry practice of adjusting fares depending on demand, frequency and season.

“They can do that and we don’t even need to approve that. Airlines have the facility to increase their fares (without the need for government intervention),” Bautista said.

In spite of this, Bautista said CAB has yet to reach a decision on whether it would allow airlines to collect the terminal enhancement fee, but the agency is likely to arrive at one within the year.

The STAR in October broke the story that domestic carriers are seeking approval from CAB to impose the terminal enhancement fee to help recover the rising cost of business in NAIA.

The airport has seen its service charges double, if not triple, since the New NAIA Infrastructure Corp. took over operations and maintenance in September.

Sources told The STAR that Philippine Airlines (PAL), Cebu Pacific and AirAsia Philippines are eyeing a fee of P75 per way for domestic flights. If approved, this means that a passenger has to pay P150 more for a round trip to anywhere in the Philippines.

PAL and Cebu Pacific also want to charge a minimum of P300 per way for international flights. Slightly below that amount, AirAsia Philippines plans to place a fee of P275 per way for foreign trips, although its overseas coverage is limited to Asia unlike PAL and Cebu Pacific.

Airlines intend to list the terminal enhancement fee as one of the items in the booking receipt of a passenger, on top of the usual costs like base fare, fuel surcharge, passenger service charge and value added tax.

They said it is important to separate it as a fee and not tuck it in the fares so travelers understand what they are paying for.