Bumped off from overbooked flight? Gov’t plans higher fees

MANILA, Philippines – Amid numerous complaints of airline passengers bumped off from overbooked domestic flights, the Civil Aeronautics Board (CAB) plans to raise minimum fees paid by airlines to P5,000 from the current P150.   

The CAB likewise wants to raise to P10,000 the current P300 that airlines are required to shell out for passengers who were denied to board overbooked international flights.

CAB executive director Carmelo Arcilla said the proposed adjustments are one of the many new guidelines that the CAB board is contemplating on amending. “The guidelines should fit the present time,” he added.
 
The CAB is targeting to release by June this year an updated and modernized passenger-protection guidelines that promise better service to travelers.
 
“We have been working on this since fourth quarter of 2011 and we will have it ready by June this year. We just need to conduct consultations,” said Arcilla, who previously told a legislative hearing that the guidelines need to be revised and updated since these were issued way back in 1972.  

However, leading local carriers Philippine Airlines (PAL) and Cebu Pacific are contesting these moves, stressing that their current scheme is enough to compensate affected passengers.

Appeasing passengers

PAL spokesperson Cielo Villaluna said these proposals need to be “studied thoroughly and be subject to public consultations” while Cebu Pacific vice president for marketing and distribution Candice Iyog said the budget airline’s package is “fair and above current regulation.”

In the case of PAL, president Jaime Bautista said in a text message to reporters that the flag carrier already offers  in exchange for the inconvenience experienced by the passenger.

He said that it is PAL’s policy to compensate a bumped off passenger with cash and/or free ticket, which can be availed off by the inconvenienced passenger via 3 ways:

• he or she will be booked on next available flight, as well as be issued a trip pass convertible to a ticket good for one year
• if PAL will call for a volunteer who is willing to give up a seat for the bumped off passenger the volunteer will take next available flight and will also be given trip pass good for travel within a year.
• passenger is paid cash equivalent to twice the air fare for passengers with scheduled domestic flight or $300 worth of miscellaneous charge order which is convertible to cash.

Likewise Cebu Pacific’s Iyog said they also have a standing policy of offering cash and/or free ticket to customers who lose their seat

• Cebu Pacific is responsible for rebooking the bumped off passenger on the next available flight
• passenger also receives a round-trip travel voucher to any domestic destination
• It also offer hotel and meals if an overnight stay is necessary.

 
Iyog previously stressed that overbooking is a standard worldwide airline practice, adding that “we understand the inconvenience this may have caused.”
        
“We are open to further discussions with the CAB and we believe that there is a need to strike a balance between consumer welfare and industry growth.  We should also look at ASEAN aviation regulation best practices particularly Singapore and Malaysia which are both fast growing aviation markets,” said Iyog in a text message.

Why are flights overbooked?

The practice of selling more tickets than available seats in a flight is an intentional business strategy among transportation and communication companies.

This strategy allows airlines, trains and cruise ships to ensure that all of its seats will result in a maximum return on investment since it reduces the chance that a plane takes off with empty seats.   

The number of oversold tickets in a flight is based on previous years’ passenger statistics of how many travelers have cancelled at the last minute for the route. A certain percentage of passengers are expected to be “no-shows” since they change their travel plans but do not cancel their reservations. Usually, businessmen cancel at the last minute when their meetings take more time than planned.

More often than not, airlines still make more money, even if they have to compensate bumped off passengers with cash or free tickets, than if they sell tickets only based on the plane’s capacity.

However, several Filipino airline passengers who have been bumped off take to social media, like Facebook or Twitter, to vent the inconvenience they experienced.

Some lawmakers have taken to holding congressional hearings, which resulted in the current effort of CAB to review passenger-protection guidelines. – Rappler.com