“It is the people’s interest, not those of a private entity, that should come first.”
The Ninoy Aquino International Airport has long been regarded as one of the worst airports in the world. And for good reason—limited runways that lead to delayed departures and arrivals, power outages, air conditioning system breakdowns, poor upkeep of restrooms, not to mention cases of theft of valuables every now and then.
We were therefore very glad when it was announced that the government was entering into a public-private partnership (PPP) agreement with the New Naia Infra Corp. (NNIC) for the long-delayed rehabilitation of the premier international gateway. After all, NAIA plays a significant role in boosting not only our tourism industry but also the economy as a whole.
But the initial cautious optimism that greeted the rehabilitation project soon turned into disappointment and even dismay when the PPP project proponent announced hefty increases in airport users’ fees.
Last week, one of the most established consumer groups in the country, the ConsumersUnion-Philippines (CUP), filed a petition before the Manila Trial Court to nullify the concession agreement between the government and NNIC, as well as portions of the Manila International Airport Authority’s Revised Administrative Order (AO)1, Series of 2024. The group said the provisions were arbitrary and discriminatory.
The consumer group said the agreement’s provisions on regulated and non-regulated fees are unlawful, lack substantial basis, and inconsistent with the public interest. For instance, on October 1, just weeks after its take-over of airport management, NNIC increased the minimum landing and takeoff fees for domestic flights for aircraft weighing between 50,000 and 100,000 kilograms from P4,817 to P15,417. For aircraft weighing over 100,000 kilos, the fee shot up from P10,806 to P34,617.
The adjustment in fees, as delegated to the NNIC, is a blatant violation of the PPP Code, the group said, because in the first place, the Department of Transportation’s power to impose and charge airport rates is itself merely a delegated power.
Transportation Secretary Jaime Bautista insists that the higher take-off and landing fees would not necessarily lead to higher airport fares. But it would be naïve, even delusional, to expect that such adjustments will not be felt by ordinary passengers. At present, there is a proposal for an airport fee hike by as much as P300 per flight. This was requested by three airlines in the country and it is currently pending approval by the Civil Aeronautics Board.
The Philippine government will receive a significant financial benefit from the NAIA rehabilitation deal with the private sector, led by San Miguel Corporation, paying approximately PHP 1 trillion over the next 15 plus 10 years—an amount more than 15 times the remittances made by the MIAA to the national government since 2010. The government will receive 82 percent of the revenue from this deal.
This raises several questions. If it was already a given that NAIA’s rehabilitation needed a realistic adjustment in airport fees, then why didn’t the government just increase the fees and implement the upgrading? How much of the revenues earned from the higher airport fees will actually go to the rehabilitation of the airport if over 82 percent will be remitted to the government as income? Moreover, will the remaining 18 percent of revenues be enough for the long-overdue make-over of the NAIA?
ConsumersUnion-Philippines, therefore, is well within its right to ask NNIC how it was able to arrive at the new amount they would ask of airlines and all other airport users. Besides, what was the formula used and how sound is the basis for this financial decision? Have they even considered the possible effects of these hikes on the public and on the tourism industry? And was there adequate public consultation on these issues?
The higher fees seem really misplaced considering the malfunction in the baggage handling system that took place on October 22 at NAIA Terminal 3.
We need to emphasize that we are not opposed to progress. There is no question that the NAIA must undergo rehabilitation. But reasonable changes in cost should be preceded by tangible results. In its desire to improve the current situation, the government should not relinquish total discretion to its private partner for it to do whatever it pleases. Air transport, after all, is a strategic and critical public service. It is the people’s interest, not those of a private entity, that should come first.
(Email: ernhil@yahoo.com)
