After parking, new NAIA operator hikes airline fees

October 3, 2024 | 12:00am

MANILA, Philippines — After first hiking parking rates, the new operator of Ninoy Aquino International Airport (NAIA) has this time started charging airlines higher takeoff and landing fees, a cost hike that could push airfares up.

Transportation Secretary Jaime Bautista yesterday confirmed that landing and takeoff charges in NAIA have gone up since Oct. 1, raising the cost of doing business in the airport.

Bautista said service fees in NAIA have to be adjusted to finance the capital requirements of New NAIA Infrastructure Corp. (NNIC) as it delivers the P170.6 billion upgrade of the gateway.

Bautista said despite the recent increase, landing fees in NAIA remain one of the cheapest in Southeast Asia. He said airlines can still shoulder the new rates now that they are regaining their financial footing due to the resurgent demand for air travel.

However, latest income reports from domestic carriers show that profits are coming down from the post-pandemic high. Philippine Airlines parent PAL Holdings Inc. reported a 45 percent drop in its net income to P5.97 billion in the first half, from P10.89 billion a year ago.

Similarly, Cebu Air Inc., the parent of Cebu Pacific, sustained a five percent decline in its profit to P3.55 billion during the period, citing rising flying costs.

As such, Bautista said it is possible airlines would pass on the additional cost of operating in NAIA to travelers.

“If it (airfare) would increase, it should not be a huge increase. Airlines can absorb part of it, part of it can be passed on to the passengers. This (increase in landing rates) is for the concessionaire to be able to recover its investments,” Bautista said on the sidelines of a forum organized by the European Chamber of Commerce of the Philippines.

So far, NNIC has paid P30 billion to the government for the upfront fee under the concession. On top of this, NNIC will turn over 82 percent of revenue from airport operations, and the group will also pay a fixed payment of P2 billion yearly.