New CAB rule to hurt budget airlines—Air Asia exec

11:51 pm | Thursday, May 31st, 2012

Air Asia Inc., the country’s newest carrier, said the government would kill the “goose that lays the golden eggs” with a new rule that forces companies to accommodate late passengers or “no-shows.”

The new rule will force airlines to refund tickets or allow the rebooking of seats of passengers who do not show up for their flights at all. The rule, under Civil Aeronautics Board (CAB) Resolution 28, will take effect on June 15.

“Our business works on the premise that seats expire. I am concerned about the rule that, if a passenger arrives late through his own fault or does not check in because he did not wake up on time, a carrier would be obliged to make a refund,” Air Asia CEO Marianne Hontiveros said. “We understand the need to protect the consumer, but please, don’t throw out the baby out with the bath.”

Hontiveros was speaking at the sidelines of the launch of the company’s new online flight booking tool for travel agents, powered by Spanish transportation tech company Amadeus Airline IT Solutions.

“The government will kill the goose that lays the golden eggs,” Hontiveros stressed, pointing out that air travel and tourism in the country grew because of the low fares offered by budget airlines.

She said mandatory refunds, even for errant passengers, went against the low-cost carrier business model that sought to cut unnecessary costs in all areas of operations. Any deviation from this low-margin model would mean higher fares for passengers.

“If we are forced to make refunds, we will have to make allowances for that so we will have to raise our fares,” said Hontiveros, who leads the Philippine unit of Malaysia’s Air Asia Berhad, Southeast Asia’s largest airline group.

The new rule on refunds was one of several regulations passed by the Department of Transportation and Communications, through the CAB, in the past two months.

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Tags: Air Asia , Air Transport , budget airlines , Business , Civil Aeronautics Board , Marianne Hontiveros , Philippines , Rules

http://pulse.yahoo.com/_TFNGUIV72VHZ7WKJSRCVUNRTQA Sorry Guys

I don’t mind you increase the fare…

But it is so unfair if a passenger cannot travel due to sickness or some other emergency situation. Recently our family of 5 reach airport late due to traffic and Zest Air did not allowed us to board. We had to pay double of the fare for each pax to re-book on the next flight. We had to shelled out again almost 10k.

Now they reduce the baggage allowance to 10kg only. If you carry 11 kg, you will be asked to pay the extra. Also there are hidden charges when you book online. Booking fee, insurance, seat selection and unexplained taxes. I do not know these collected taxes really go to the government..

NON-REFUNDABLE
NON-RE-BOOKABLE
NO SHOW FEE
CANCELLATION FEE

are all the thing of the past.

BE FAIR……

THANK YOU SEC. MAR ROXAS AND CAB.

Pls make it compulsory for these airlines to use the tube/bridge at the airports.

HATEBIGOT

While I understand some of the point you made, taxes and the breakdown of it shows on the website so are the fees. There is always an option for you to opt out of the seat selection thingy. I frequent air travel, and most often than not late passengers are the most annoying people ever. If you feel that you’re gonna stuck in traffic, why not THINK and leave home earlier than your flight schedule? Don’t get me wrong though, I am with you regarding the fees and the horrible service these carriers do but its one thing to be smart (by showing up early before check in time and travelling light) and one thing to just be all complaining without doing our share to make air travel pleasant for all of us passengers.

http://pulse.yahoo.com/_TFNGUIV72VHZ7WKJSRCVUNRTQA Sorry Guys

I have made up my mind with so much of inconvenience and poor service just because they are budget carriers…. that is palusot..

I am a frequent traveler too and now I prefer to travel on PAL for the following reason:

Their fares are sometimes cheaper than these so called budget carriers.
User friendly online booking and helpful website
Fares shown in the beginning is the same when you check-out (no gimmicks)
Flights are well maintained and clean cabin.
Boarding and de-planing is easy (always use tube/bridge)
Free news papers onboard
Free snacks / drinks
Spacious leg room and comfortable seating arrangements
Friendly staff
Bigger aircraft
15 kg baggage allowance on domestic flights
joeyrivera

Every passenger has an obligation to check-in to their flights 3 hours before their scheduled departure
HATEBIGOT

agree.
Oliver82

Agree ako sayo.. sa mga SPECIAL MENTION sa Final Calls your not helping. Late na nga ang plane, may na lelate pa? and PLEASE iwan nila na lng ang mga gamit na hindi naman kailangan para less bagage.. thanx.

http://joboni96.myopenid.com/ joboni96

sabihin mo kamo

the government would kill the “people that benefit from the golden eggs”
Mario_Garcia

So raise your fares but do give the passengers their refund for it to be fair to both the airlines and the passengers.
PolarBear

if airlines can’t shape up then they should SHIP OUT. it’s that simple. these budget airlines are those who are alleged to overbook flights, remember. for what purpose?
rosamistika16

i guess nobody wants to arrive late and be left by airline without due cause. i knew travelers have a hectic schedule that no one wanted to be late but there are instances that you cannot avoid to be late for so many reasons. this case should be understood by any and all airlines and rebooking if not refunding must be enforced.

i had once left by an airline by about 5mins from counter’s closing time. i didn’t want to be left but what can i do when i had encountered traffic going to airport because of accident on the road that no way can we do turns for us to get out of that traffic?

others might say, why not go to the airport early in order for you to be sure that you will arrive to the airport on time? If you are an OFW, a family man, or a man with so many things to do while you are in the phils, i think you know the answer.

Thanks you CAB. for Hontiveros, you are just talking for your company’s benefit but not for the people.
samarutan

Refund is not really an issue. With the restrictions that airline impose on passengers like cancellation and no show fee, there is not much to refund.
http://profile.yahoo.com/ZXG4XAF7PGNUNBJSXI2S2GP3CE sonny

Airlines cannot always be held accountable for delays. Like for instance due to bad weather, airport closures (like, POP (President of The Philippines) about to land or take-off from a particular airport, downed aircraft obstructing runway, security alert, etc.) and other “force majeure” issues. If above reasons are mentioned by airline, then they have no liability. Reasons like due to mechanical failures however are contestable.

I do agree that if PAX is late or “no show, NOSHO” which is outside of the control of the airline, PAX is not entitled to a refund.

Peace.

New CAB rule to hurt budget airlines—Air Asia exec

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