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May 27, 2017

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Philippines bans airlines from overbooking

MANILA -- The Philippines' aviation regulator announced Wednesday a ban on local airlines overbooking flights, following an outcry from would-be passengers who had been denied seats.

The ban takes effect on June 15 even though low-cost carriers have protested that this would severely damage their business model, Civil Aeronautics Board Executive Director Carmelo Arcilla told AFP.

"There is a strong public outcry against these services," Arcilla said, citing passengers for domestic destinations who were stopped from boarding because the carriers had sold more tickets than there were seats available.

The airlines have argued they need to allow for passengers who choose not to fly at the last moment or demand to switch to another flight, he added.

With the ban, airlines that fail to deliver seats to paying passengers will be fined 5,000 pesos (US$116) for each person bumped off a flight, on top of the ticket refund.

"Of course if there is recurrent practice and bad faith it (an airline's operating license) can be suspended or worse. It depends on the magnitude of violations," Arcilla said.

Driven mainly by cheaper fares, Philippine airline traffic has grown at double-digit pace in four of the past five years, including a 12-percent rise last year to 34.5 million passengers, according to Arcilla.

Budget carrier Cebu Pacific, the country's largest airline by revenue and fleet size, said it would appeal the ban, arguing it would have to raise fares by at least 10 percent to comply.

"Low fares, a social equalizer and the growth catalyst that has seen millions of people fly for the first time — and keeps them flying — will be history," it said in a statement.

Cebu Pacific also said overbooking was "industry practice" for airlines, as well as hotels, ships and trains, around the world.

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