CAB compromises with airlines on overbooking, ticket refunds
MANILA, Philippines - The move of the government to address mounting passenger complaints on airlines that bump off passengers and do not allow ticket refunds for delayed or cancelled flights will not take effect on June 15 as scheduled.
On late Wednesday, June 13, an official of the Civil Aeronautics Board (CAB) said it had to "fine tune" its twin orders since it also reviewed arguments raised by four of the six local commercial airlines in their motions for reconsideration.
CAB secretary Eldric Paul Peredo in a text message said in a text message that the following will be implemented instead:
- On overbooking: instead of totally banning it, additional restrictions will be imposed. From the industry standard of allowing up to 10% overbooking in a flight, CAB will only allow up to 5%. Peredo said airlines may face sanctions if the airlines overbooked at the expense of the passenger. “There maybe situations where it will happen, and if it does result in offloading of passengers, then there will be stringent reportorial requirements for us to determine whether they did it maliciously or whether it was a reasonable exercise.”
- On ticket refunds and rebooking: instead of imposing on airlines to allow these on promotional fares, CAB decided that if rebooking happens too close to the flight, like within 24 hours, there will be additional fees for the passenger. On the other hand, if it is the airline that initiated to rebook the passenger then the passenger is not obligated to pay anything extra.
The airlines have argued that both issues are crucial to their financial ability to lower their fares, making flying more affordable to more Filipinos, and in the process, contributing to the tourism goals of the country.
The airlines said the practice of overbooking is often misunderstood as mainly benefiting the airline when, in fact, overbooking benefits the consumers as the airline artificially inflates capacity and is able to spread their cost across more seats which would mean lower fares for the passengers.
The airlines explained that the reason why promotional fares are highly restricted is because of less transaction costs associated with the same. When these restrictions are removed on certain fare types then these would certainly increase the related transaction cost, which means that the public should brace for higher air fares.
“The airlines want the resolutions entirely set aside, citing business considerations and worldwide practices. But we cannot deny that there are complaints so we have also to uphold public convenience and service. But we cannot totally overhaul everything because we have to align ourselves with the thrust of the DOTC (Department of Transportation and Communications) to have a more comprehensive passenger rights bill soon,” said Peredo.
The orders are set to take effect but stressed that these are still interim measures, pending the actual issuance of the DOTC’s more comprehensive and institutionalized Bill of Rights. - Rappler.com