IATA warns against excessive regulatory burden for PH aviation sector
The International Air Transport Association (IATA) has warned the Philippine government against ill-conceived policy initiatives that over-regulate the aviation industry.
“Well-constructed regulation has played a key role in making the industry safe and reliable. But excessively onerous regulation can be a huge burden on the ability of aviation to deliver its social and economic benefits,” said Alexandre de Juniac, director general and CEO of IATA.
De Juniac cited the new consumer protection legislation in the Philippines that would cap air fares, prohibit overbooking and impose onerous consumer protections extra-territorially.
He said airfares in the Philippines were 77 percent cheaper in 2016 than a decade before and that the number of destinations served directly from the Philippines increased from 40 to 55, while the number of travelers nearly tripled from 24 million to 64 million.
“Aviation is competitive. Airlines offer a wide variety of fares at different price points to satisfy consumer needs. Introducing government imposed fare caps would likely have the unintended consequence of reducing deeply discounted fares. If airlines cannot charge a premium for ultimate flexibility, then covering costs will likely lead to a rise in average fares,” de Juniac said.
De Juniac likewise called on the Philippine government to avoid implementing a tourism tax and to abandon a proposed Green Fee.
“Short-term budget gains quickly disappear when tourist arrivals drop. The government should focus on making wise investments in the tourism infrastructure that will encourage people to visit. The extra tourist dollars you attract will pay for the investments and make a greater economic contribution,” he said.
“The proposed Green Fee is misguided and should be abandoned. Governments through the International Civil Aviation Organization (ICAO) have agreed a global approach to climate change based on improvements in technology, infrastructure and operations. And there is an agreed Carbon Offsetting and Reduction Scheme for International Aviation—CORSIA. The cause of sustainability is best served by the Philippines supporting this global approach and volunteering to participate in CORSIA,” he added.