Sometimes the government does work to promote public interest. Prime examples are Resolutions Nos. 28 and 29 (BM3-05-11-2012) adopted by the Civil Aeronautics Board (CAB) on May 11, 2012.
Suspension Overbooking Practice
In Resolution No. 28 (BM3-05-11-2012), the CAB suspended “the application of pertinent provisions of Economic Resolution No. 7, as amended (E.R. 7), relating to overbooking” thus “effectively banning the practice of overbooking in the domestic sector.”
In justifying its move, the CAB stated in the Whereas clauses of Resolution No. 28 that -
“the Board takes cognizance of the prevailing public outrage against delayed and/or cancelled flights, as well as passengers denied boarding, presumably due to overbooking in domestic scheduled flights;” and
“there is thus a need to re-examine the propriety of overbooking as a revenue-management option practiced by airlines in the domestic sector vis-à-vis their obligation under their Certificate of Public Convenience and Necessity to provide services that are efficient and conducive to the convenience of passengers”.
Suspension of Restriction on No Refund and No Rebooking Practice
In Resolution No. 29 (BM3-05-11-2012), the CAB suspended “the non-refundable and non-rebookable conditions of low-cost fares for domestic flights.”
Naturally, Resolution 29 applies “only to low-cost and regular fares for domestic scheduled flights of domestic carriers.” (Section 1)
The period of refundability and rebookability are “subject to the airline’s conditions of carriage, but no more than one (1) year from the date of the original or first intended flight.” (Section 4)
On Rebooking
“The passenger may rebook his/her flight in case of:
a. Cancellation by the passenger of the reservation, subject to payment of reasonable rebooking fees that shall be limited to actual administrative costs, and/or the fare difference, if any. Provided, that late check-ins and actual “no-shows” shall be considered as mere cancellation of the reservation by the passenger …
b. Flight cancellations for security and safety reasons, suspension of a route, or other circumstances beyond the control of the airline.
c. Flight diversions or flight delays of at least one (1) hour.” (Section 2)
On Refunds
“Subject to the submission of required documents, the passenger may request for a refund of his/her fare in case there is/are:
a. Cancellations by the airline and route suspensions for reasons other than safety and security, subject to payment of reasonable administrative or other applicable fees.
b. Flight delays or postponements of more than three (3) hours.
c. Disallowance of boarding or failure to board for reasons other than non-observance of airline or government policies or laws. Provided, that on top of the refund, the airline shall pay the passenger denied - boarding compensation, as provided for under E.R. 7, amended.
d. Death or serious illness of the passenger before the flight.” (Section 3)
In response to criticism that the CAB’s restrictions may lead to the demise of low cost carriers (LCC), CAB executive director Carmelo Arcilla said -
"The operation of an airline, whether LCC or legacy, is a public utility and as such, an airline is obligated to provide public service and convenience more than its right to generate revenues and its business interests. While we are happy with the success of LCCs in the Philippines, it is instrumental in the growth of aviation and air traffic in the country, we have to draw the line. Low-cost airline doesn't mean that services can be shabby, services can be unreliable and inadequate".[1]
Denying refunds or rebookings to passengers who came on time, paid in full and have done everything to take their flights, is just unfair and tantamount to cheating. While making flights affordable for every Juan is laudable, making some Juan suffer is not.
Since the old rules have been merely suspended pending further review of the issues, perhaps overbooking may be allowed to ensure airlines fill as many empty seats as possible (in the event of last-minute passenger cancellations) to allow them to make the most of their costs. But, as practiced in other countries, airlines must be required to ask for volunteers before automatically bumping off a passenger and offer those bumped-off rewards like free upgrades, free flights, free meals, etc.
It is unimaginable how refunds and rebookings would spell the demise of budget airlines as they offer the best marketing tools to ensure every Juan’s return.
[1] Garcia, C. R. A. (2012, June 5). Stricter cab rules may spell demise of budget airlines. Retrieved from http://www.abs-cbnnews.com/business/06/05/12/stricter-cab-rules-may-spell-demise-budget-airlines
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