Monday, April 05, 2010

On airport terminal fees

The Holy Week and its long vacation is over. Many Filipinos now fly instead of taking the boats in visiting various islands and provinces in the country. There are more budget airlines now than before, so that flying has become more affordable to more people. And this is where the government makes lots of money, foremost of which is the collection of airport “terminal fee” of P200 per person for domestic flights, and P750 per person for international flights.

Except in Thailand and Vietnam I think, government airport administrators in many airports in Asia, the US and some European countries do not collect “terminal fee”. Perhaps for some of those airports, the “terminal fee” is included in the plane ticket costs. Passengers do not need to check their wallets if they have the local currency to pay for the last-minute fees. Besides, those airports are very big, modern and beautiful, compared to the airports in Manila (terminals 1, 2 and 3), Clark, Cebu and other provincial airports.

For me, the P200 per person domestic terminal fee is big, even unnecessary. For one, passengers normally do not stay long inside the airport terminals. After queuing for security check-up and to check in their airline, passengers just wait for about 30 to 45 minutes before they board their plane. There are not even drinking fountains in the biggest terminal, terminal 3, so people will have to buy bottled water or soda/juices inside the shops, and the prices there are expensive as those shops and tenants pay a handsome fee for their lease and monthly rental at the airport.

Mall owners can give the public equally comfortable air-conditioned place for hours for free, and the food and drinks are cheaper.

The government, through the various government-owned airport authorities, makes plenty of money as a monopoly airport operator. Among these revenue sources are:

1. Passenger terminal fee, as discussed above.
2. From the various airlines - landing fee, navigation fee, ground handling fee, etc.
3. Lease and rental from shops inside the airport terminals.
4. Lease and rental from taxi and transport operators, hotels, that occupy spaces at the passenger arrival area.
5. Advertisers inside and outside the passenger terminals.
6. Car parking fee.
7. Franchise or related fee for the two airport-based taxi lines (yellow taxi and “Bayan ko” taxi).
8. Passengers’ waiting area in the case of NAIA terminal 1.
9. Other revenues.

While plane fares are dynamic and changing, depending on the season, day and time of flights, government terminal fees are fixed. Sometimes budget airlines give promo fares of only P10 on a few seats in each flight, the terminal fee plus other fees (aviation security fee, fuel charges, etc.) are fixed.

Aside from revenues by airport administrators, the government also collects more revenues from the airlines and other tourism-related investments. These include more fuel taxes (excise tax and VAT), more corporate income taxes and VAT.

I believe that to encourage domestic tourism and investments, airport terminal fees should be abolished. As enumerated above, the airport administrations have plenty of other revenue sources to recover the “foregone” revenues of terminal fees. Passengers include the cost of terminal fee (P200 each way or P400 per passenger for domestic flights) in deciding whether to visit a particular place or not. With this additional cost to passengers, there should be fewer than potential number of passengers that actually fly. Which adversely affect domestic tourism, domestic trade and investments.

When there are more investments and jobs in the provinces, there will be less poverty, less government expenditure for social and economic services, less social tension and unrest and less political and economic instability.


Anonymous said...

So many fees, and the government can't even give us a decent airport. The airport seemed more like bus terminals...what a joke. If they want to attract more tourists, first thing they should do is build a real modern airport...and everything else follows.

Anonymous said...

That is Philippine Style, only in the Philippines. Shame on the government.. only in the philippines.