SUMMARY
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MANILA, Philippines – Starting June 15, domestic airlines face suspension and fees if they bump off passengers from an overbooked flight and disallow refunds and re-booking of airline tickets.
This final order was imposed by the Civil Aeronautics Board (CAB) after considering the numerous consumer complaints against local airlines that have been aggressively expanding flight frequencies and offering promotional fares in the past years.
This marks the first time the CAB amended its 40-year old regulation on compensation for denied boarding and delayed or cancelled flights.
The CAB first issued these orders last May 4. Following required consultation process with stakeholders–including representatives of airlines who presented their position papers during a board meeting last May 11–the CAB resolved “to sustain” its orders which will be published on June 1 in a newspaper. As a rule, these CAB resolutions will take effect 15 days after publication.
Overbooking
CAB’s resolution no. 28 (BM3-05-11-2012) suspends provisions on overbooking contained in section 3, Economic Regulation No.7, as amended, until further notice.
This means airlines that violate this will be slapped with a P5,000 fine (from the previous P150), multiplied by the number of passengers bumped off or denied boarding.
For the bumped off passengers, the compensation for denied boarding will be increased to P5,000 for domestic flights and P10,000 for international flights.
In addition, the customer would be given 100% of the value of the first remaining flight coupon.
“The board takes cognizance of the prevailing public outcry against delayed and/or cancelled flights, as well as passengers denied boarding, presumably due to overbooking in domestic scheduled flights,” said the CAB.
Earlier, airlines justified overbooking as a worldwide industry practice. Some passengers tend to book flights but do not take them, resulting in paid but empty seats. Overbooking these statistically computed empty seats in a flight in a particular season maximizes the revenue management options of the airlines.
CAB, however, said the airlines’ obligation to its passengers is paramount, as specified in the “certificate of public convenience and necessity” granted to them by the government.
Refunds, rebooking
Resolution no. 29 (BM3-05-11-2012), meanwhile, suspends the non-refundable and non-rebookable conditions of low-cost fares for domestic flights.
“The period of refundability and rebookability shall be subject to the airline’s condition of carriage, but in no case more than one year from the date of the original or first intended flight,” said the CAB.
The CAB said complaints stemming from the non-refundability and non-rebookability of low-cost fares have become prevalent, which compelled it to re-examine the validity and justifiability of the restriction attached to low-cost fares.
Growing complaints
The transportation department is also working on the creation of a comprehensive Passenger Bill of Rights to address the increasing number of air transport-related complaints.
Currently, local commercial airlines have an air fleet of 119–almost double the 62 in 2008. Total domestic airline passengers also grew to 30 million in 2011–almost double the 18 million passengers in 2006.
This aggressive industry growth also resulted in more passenger complaints. In 2010, the CAB received 77 various complaints, 81 in 2011, and 29 in the first quarter of 2012 alone.
Legislators who have experienced being inconvenienced by domestic airlines have also led to congressional hearings in the past.
A recent headline-grabbing airport brawl between the camp of celebrity couple Claudine Barretto and Raymart Santiago and columnist Ramon Tulfo is not isolated. But their issue on lost baggages is yet to be covered in another set of rules amendments. – Rappler.com
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