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Oct 3, 2017 @ 18:02

PH Air Asia opposes capping of airfares


Philippines Air Asia is opposing the government’s plan to put a cap on domestic airfares, saying such a move may have an adverse impact on growth of the aviation sector.

Under the Civil Aeronautics Board’s proposal, the floor rate shall be fixed in a rate not lower than 20 percent of a current ceiling rate.

AirAsia Philippines legal counsel JulIus Polinga said CAB’s proposal to restrict airfares “could lead to the demise of smaller carriers and dampen the tourism industry in the Philippines while the rest of the ASEAN continue to flourish under liberalized environment.”

“The imposition of a floor and ceiling rate on domestic fares may unnaturally screw average domestic fares to higher levels while fares for international flights will remain as is,” Polinga said in a position paper submitted to CAB.

Capping airfares may result in more passengers traveling abroad where fares are lower, Polinga said.

CAB executive director Carmelo Arcilla, however said nothing was final yet.

“We are still studying it,” he added.

Polinga said the introduction of promo fares by low-cost carriers revolutionized the Philippine aviation industry.

“We hope that the government continues to pursue a liberalized regime like the neighboring ASEAN countries, Polinga said.

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