The Department of Transportation (DOTr) on Wednesday ruled out adversely impacting tourism flows as a consequence of adjustments in terminal fee attracting so much flak from travelers, stakeholders and observers alike.
At the sidelines of the 2024 Aviation Summit, Transportation Secretary Jaime Bautista said the increase in airport charges and passenger terminal fees is part of the terms and conditions outlined in the concession agreement the government forged with the new NAIA operator.
“It’s (provided) in the administrative order. The AO is part of the concession agreement. But, as I mentioned earlier, we can review it,” Bautista said.
He urged those who criticized the adjustments to allow enough time for the adjustments to bite and appreciate their benefit that may not be too obvious at the moment but quickly adding the government is prepared to discuss the matter with the airlines and stakeholders.
“Part of the process is a continuing dialogue with the stakeholders,” he said in acknowledging the practical impact of the adjustments on airline pilots and aircrew and the traveling public, for instance.
Bautista explained the higher airport fees may not necessarily result in higher air fares and that even if it does, the increase should only be minimal.
According to Bautista, the airlines can absorb a part of the adjustment or alternatively pass it on to passengers.
“But passengers won’t mind paying a little bit more than what they are paying now if they have a very good airport experience,” he observed.
“And for a small amount of increase in the cost, I think it will not affect tourist arrival,” he added.
Bautista also acknowledged the adjusted airport charge and passenger terminal fee structure would enable the San Miguel Group, the new concessionaire, to recover some of its investments.
He said the airport charges, which include landing and take-off as well as parking fees, would increase before end-2024, while passenger terminal fees would also increase by 2025.
The government formally handed over the operations and maintenance of NAIA to the New NAIA Infrastructure Corp, (formerly SMC SAP & Co. Consortium) last September 14, 2024.
The NNIC signed a P170.6-billion contract in March 2024 to operate, maintain and upgrade NAIA for 15 years, extendible for another 10 years.
San Miguel Group earlier said it is mobilizing at least P88 billion in capital investments within the first six years and at least P122.3 billion in capital investments for its entire 25-year concession period.
The government expects to generate P900 billion in revenues in the course of the 25-year concession period, inclusive of the P30 billion upfront payment, P2 billion annual payment and 82 percent government revenue share.
