Passengers using the Ninoy Aquino International Airport (NAIA | MNL | RPLL) are bracing for upcoming rate increases as the New NAIA Infrastructure Corp. (NNIC) prepares to take over operations. This transition, aimed at modernizing and enhancing airport facilities, is set to bring changes that will impact rental fees, terminal charges, and other associated costs. While the improvements promise a better passenger experience, the financial and logistical implications are drawing considerable attention and concern.
The consortium led by Ramon Ang’s San Miguel Corporation is set to take over and rehabilitate Manila’s aging airport by 14 September 2024. This move is part of the government’s broader strategy to upgrade the NAIA, which has long been criticized for outdated facilities and operational inefficiencies. The Public-Private Partnership (PPP) initiative is expected to inject much-needed investment into the airport’s infrastructure, aligning it with global standards. However, these upgrades come with a cost that will be passed on to passengers and airport tenants.
Office Relocations & Employee Impact
Several NAIA concessionaires and operators have been asked to find new office locations as the NNIC is set to take over the airport’s operational management. Last month, these businesses received a 40-day “notice to vacate,” according to several sources.
The transfer will impact thousands of employees, many of whom will need to find new housing arrangements. For example, approximately 500 employees of a local airline based in NAIA Terminal 3 will need to relocate their offices and residences. Concerns have been raised about the lack of a concrete plan for this transfer and its implications for the affected concessionaires and employees. In addition, there are uncertainties regarding media coverage at the airport under new management, as media accreditation IDs have been renewed only until September 2024, instead of the usual one-year period (or until the end of 2024).
Expected Rate Increases
Terminal Fees
One of the most immediate changes passengers will notice is an increase in terminal fees. Currently, passengers are required to pay a passenger service charge, also known as a Terminal Fee, of PHP200 for domestic trips and PHP550 for international trips. However, with the looming privatization of NAIA, the Department of Transportation (DOTr) has confirmed a proposal to raise the terminal fee for international trips to PHP950 starting in 2025 to compensate the concessionaire for the significant investments they will make.
This proposed Terminal Fee hike is still subject to approval by the Cabinet and a committee composed of representatives from several government agencies including the DOTr, Department of Finance (DOF), and National Economic and Development Authority (NEDA).
Rental Fees for Tenants
Airport tenants, including airlines, retail shops, and food and beverage outlets, will also face higher rental costs. These businesses, essential for a vibrant airport environment, will need to adjust their pricing strategies to accommodate the higher overheads. This could potentially lead to increased prices for goods and services offered within the airport premises, further impacting travelers.
Parking & Other Services
Parking fees and charges for other services such as baggage handling and lounge access are also expected to go up. The new management is likely to implement a tiered pricing structure to cater to different passenger needs, ensuring that premium services come at a premium cost. This shift aims to improve overall service quality but may strain the budgets of frequent travelers and airport staff.
Impact on Flight Costs
Aside from higher terminal fees, the proposal also seeks to increase airport charges such as landing, takeoff, and parking fees before the end of 2024. While these fees are not directly charged to passengers, airlines may still pass on the extra costs to their customers by raising ticket prices.
The proposed increases have elicited mixed reactions from various stakeholders. While many welcome the long-overdue improvements, there is concern about the financial burden on passengers and tenants. Advocacy groups are urging the government and the new management to implement the increases gradually and ensure transparency in the process.
Aviation groups such as the Air Carriers Association of the Philippines (ACAP) have fiercely opposed the rate hike, arguing that it would make NAIA among the most expensive airports in the region and be “detrimental to a majority of the Filipino traveling public at a time when costs throughout are rising.”
The DOTr Secretary defended the big-time hike by pointing out that NAIA has not raised fees for 24 years. He also compared NAIA’s PHP550 international terminal fee to the relatively higher PHP750 terminal fee at both the Mactan-Cebu International Airport (MCIA | CEB | RPVM) and Clark International Airport (CRK | RPLC) — two award-winning airports developed through public-private partnership agreements.
The anticipated rate hikes are part of a comprehensive plan to overhaul the NAIA, making it more competitive and passenger-friendly. Upgrades will likely include modernized terminals, enhanced security systems, improved baggage handling, and more efficient check-in processes. These changes are crucial for NAIA to regain its status as a premier gateway to the Philippines and compete with other major airports in the region.