AIR PASSENGERS will likely pay higher fares in 2025 as the Civil Aeronautics Board (CAB) is expected to finish its deliberation on the proposed collection of terminal enhancement fee this year.
“Actually, this is being deliberated right now by the CAB. They are now studying whether or not we will allow [airlines] to [collect these additional fees],” Transportation Secretary Jaime J. Bautista told reporters on Thursday.
In October, local carriers sought CAB approval for the collection of the terminal enhancement fee to cover the rising cost of using Ninoy Aquino International Airport (NAIA). The private operator, New NAIA Infra Corp. (NNIC)., has hiked landing and takeoff fees, and other fees starting October.
The proposal of local carriers to collect terminal enhancement fees will be deliberated by the CAB Board within the year and come up with a decision as early as January 2025, Mr. Bautista said.
He said the possibility of “tucking in” the proposed terminal enhancement fees in passenger’s base fare is also being considered as an option.
To recall, local carriers have requested an additional P150 terminal enhancement fee for domestic roundtrip flights and about P300 per way for international flights.
The additional fees were earlier proposed to be collected as a separate fee on top of the base fare. It will be itemized on the passenger’s booking receipt separately from the base fare, like passenger fuel surcharge and value-added tax.
Mr. Bautista said the Department of Transportation (DoTr) will not object if airlines decided to tuck in the proposed terminal enhancement fees in passengers’ base fare because airlines have the option to increase their airfares without the approval of CAB.
“We are okay with it because they can just do that. We do not even need to approve that, they have the facility to do that… The pricing of airlines is based on revenue management. You see, it increases during peak season. They can just tap this [approach] in increasing and decreasing fares,” Mr. Bautista said.
Nigel Paul C. Villarete, a senior adviser on public-private partnership at the technical advisory group Libra Konsult, Inc., said it would be best if airlines decided to include all additional fees in the base fare as it would lessen the confusion from passengers.
“Airlines won’t like it though, because it would make airfares higher due to the add-on costs and they would have to bear the difficulty of remitting all other costs attached to the ticket,” he said.
Further, Mr. Villarete said it would be difficult to tuck in any additional fees in base fare because it passes the responsibility to the airlines which can cause disagreements if not properly communicated.
Aside from the three local carriers: Philippine Airlines operated by PAL Holdings, Inc.; Cebu Pacific operated by Cebu Air, Inc.; and Philippines AirAsia, Inc. (AirAsia Philippines), Manila International Airport Authority (MIAA) said previously that other foreign carriers operating at NAIA may also seek the same relief. — Ashley Erika O. Jose