The Civil Aeronautics Board (CAB) in the Philippines has set
new rules for all domestic flights in hopes of ending overbooking and the use
of “no refunds, no rebooking” policies. As of June 15th, any flight
that is overbooked will be slapped with a fine of PHP5,000 (about $115 USD) multiplied by however many passengers were not
granted boarding or bumped off the flight.
Also, starting June 5th, the new regulations also
entitle domestic passengers PHP3,000 ($69 USD) and international passengers
PHP5,000 in compensation.
Philippine carriers are concerned to how greatly these new
policies will affect their business strategy. The new regulations allow passengers
to rebook flights within one year of issue, and AirAsia CEO Marianne Hontiveros
is worried that it will require a revamp of their entire business model:
“If passengers can
refund and rebook at any time, we’re going to have to make allowances for that,
which means we have to build it into our pricing structure, and that kills the
whole low-cost concept.”
Philippine carriers do not have much time to make adjustments
as the new overbooking policy is to go into effect in only 10 days.
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