CebuPac pays P52-M penalty

By: Miguel R. Camus - 10 years ago

FILE PHOTO

MANILA, Philippines—Cebu Pacific, the country’s biggest budget carrier, has fully paid the P52.1-million penalty slapped on it by the government for numerous flight delays and cancellations during the busy Christmas holidays.

Civil Aeronautics Board (CAB) Executive Director Carmelo Arcilla on Thursday said the government had received the full amount. A Cebu Pacific spokesperson also confirmed the payment on Thursday.

“The amount was directly deposited in the account of the National Treasury in accordance with the rules,” Arcilla said.

The payment was made after the CAB earlier this month found Cebu Pacific in violation of its certificate of public convenience and necessity.

In deciding on the fine, the CAB cited “operational lapses and mishandling of passengers” on Dec. 24 to 26, 2014. As many as 10,400 passengers were affected during the period, the CAB said.

Cebu Pacific, which earlier blamed bad weather and airport congestion, also admitted in a hearing last week that the situation was caused by a high amount of absenteeism by the ground handling staff that it contracted from a third-party provider.

Cebu Pacific CEO Lance Golongwei also apologized for the blunder last week.

As noted, the fine went directly to the government, not to the affected passengers, prompting some lawmakers to suggest that the CAB should play a bigger role in this regard.

The CAB, however, explained the limitations of its power and role.

Arcilla said passengers, with its assistance, could seek “satisfaction of their rights from the airline” or they could pursue a legal case through the local courts.

“The CAB is an administrative agency invested with authority under its charter to oversee the aviation industry, through the issuance of pertinent orders and regulations,” Arcilla said.

“However, it may not be within the prerogative of the CAB under its limited jurisdiction to assess a situation as the Dec. 24-25 event, and determine compensation, in a manner that is akin to an adjudication of rights and award of damages that properly pertains to the courts of law,” he added.

The 2012 Air Passenger Bill of Rights outlines how passengers can be compensated. Specifically, a delay of at least six hours grants a passenger either a free rebooking or refund on top of “compensation” equal to the value of the ticket, Arcilla said.

Cebu Pacific, a subsidiary of Gokongwei-led JG Summit Holdings Inc., is the only profitable domestic carrier operating today and is largely credited with bringing down the overall cost of air travel in the Philippines.