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Philippine carriers ordered to drop overbooking, 'no refunds, no rebooking' policy

Posted Date: Tuesday, 5-Jun-2012

THE PHILIPPINE Civil Aeronautics Board (CAB) has revised its regulations to prevent domestic airlines from overbooking planes and selling non-rebookable, non-refundable tickets, following mounting complaints from passengers unable to board flights even on high frequency routes.

Starting June 15, CAB Resolution No. 28 will hit carriers with overbooked flights a sum of PHP5,000 (US$115) multiplied by the number of passengers bumped off or denied boarding.

In addition, the amended CAB Economic Regulation No. 7, effective June 5, entitles domestic and international passengers to PHP3,000 (US$69) and PHP5,000 in compensation, respectively, plus the value of the unflown flight sector.

The revised regulations also allow passengers to rebook or avail of refunds for low-cost fares within one year of issue, subject to the carrier’s conditions of carriage, even if they are ‘no-shows’ for the flight.

The changes have prompted appeals from domestic LCCs, who fear that their business models will be affected. The CAB has promised to review their concerns.

“We understand the need to protect the consumer, but (our business) works on the premise that seats are expirable – they are not a commodity that you can reuse over and over again," said Philippines’ AirAsia CEO, Marianne Hontiveros. "Once an aircraft flies...once the counter closes, those seats are gone." 

“If passengers can refund and rebook at any time, we’re going to have to make allowances for that, which means we have to build it into our pricing structure, and that kills the whole low-cost concept," she added.

Sourced:TTG Asia