After the Philippine Department of Transportation (DOTr) ordered the suspension of flight bookings on local airlines on AirAsia MOVE (MOVE) early this month – the Philippine Civil Aeronautics Board (CAB) imposed a PHP ₱6 million fine ( ~USD $106,482) following allegations of selling overpriced flight bookings on AirAsia's digital platform.
In a resolution dated June 20, CAB Executive Director Carmelo Arcilla stated the regulator found MOVE “engaged in deceptive practices, in violation of the provisions of the Air Passenger Bill of Rights (APBR) and the CAB’s fare regulations.”
“MOVE’s conduct and misrepresentation in the publication and sale of airline fares imputed damage to the Philippine air carriers' market image and compromised the integrity of the air transportation market,” said Arcilla.
Supporting the move, the DOTr said in a statement: “The ₱6 million penalty imposed on AirAsia MOVE sends a clear message: the government will not tolerate any form of abuse to Filipino passengers.”
The DOTr concluded: “The DOTr will continue to protect the rights of the commuting public and to hold accountable those who violate established consumer protection regulations.”
Technical Issues, Third-Party Suppliers
Previously, the allegations of the overpriced tickets were from customers booking flights from Manila to Tacloban in the central Philippines. During a press event in Manila on June 2, Transportation Secretary Vince Dizon cited flights on MOVE's website for two passengers, one-way with Philippine Airlines from Manila to Tacloban for around PHP 77,704 (~USD $1,397) – or around PHP 38,852 per person - higher compared when booking directly with Philippine Airlines (PHP 49,507 or ~USD $889).
AirAsia MOVE is operated by Malaysia-based Capital A Berhad's subsidiary Move Travel Sdn. Berhad. In addition to selling flight bookings on AirAsia Group airlines including Philippine-based AirAsia Philippines, the online platform also sells bookings on other airlines. While affiliated with the AirAsia Group carriers, it operates as a separate company.
During the initial CAB hearing on June 5, MOVE said that the online platform does not set or manipulate airfares, and the platform displays flight inventory and pricing data provided by authorized upstream suppliers, including third-party aggregators and global distribution systems.
In its response to the suspension of Philippine bookings on its platform on June 2, MOVE stated the discrepancies in fare displayed for certain routes – including Philippine domestic flights operated by Philippine Airlines – were caused by a temporary data synchronization issue with a flight pricing partner. MOVE further added the situation affected other booking platforms such as Agoda, kiwi.com, and Traveloka. Since the issue was discovered, MOVE brought up the matter with the third-party pricing provider and has taken steps to further enhance safeguards to prevent a similar, future occurrence.
MOVE Chief Executive Officer Nadia Omer said in a statement in response to the suspension of sales of bookings in the Philippines: “MOVE has been working closely with relevant authorities and is fully compliant with all regulatory requirements applicable to Online Travel Agencies (OTAs) operating in the Philippines.”
While the fare discrepancies were attributed to the technical issues and third-party suppliers, MOVE was found to still be liable as it is bound by CAB's fare regulations and orders.
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