The Ramon Ang-led consortium NNIC offered the largest revenue share to the government at 82.16 percent—more than double its two competitors’ — and committed to invest P170.6 billion.
To some, traveling is a luxury, while to others it’s a necessity. Either way, anyone who uses NAIA is obliged to pay fees imposed by the airport operator.
Beginning October 2024, Philippine residents should increase their travel budget to accommodate the increased fees at the Ninoy Aquino International Airport (NAIA).
On September 25, NAIA’s new operator, the New NAIA Infrastructure Corp. (NNIC), announced that higher airport terminal fees will be implemented in September next year. Domestic passengers will have to pay P500 from the original P200; international terminal fee will increase from P550 to P950.
A week later, on October 1, parking rates were hiked from P40 to P50 in the first two hours with an additional P25 per succeeding hour. Meanwhile, overnight rates were jacked up by 300 percent, from P300 to P1,200.
In 2022, NAIA earned P2.8 billion from terminal fees and P3.7 billion from landing and parking fees. This comprises two-fifths of the airport’s gross operating income of P9.8 billion.
The following week, on October 10, NNIC introduced higher rates for NAIA’s meet-and-assist or VIP services, which includes the use of the airport’s VIP lounge. From a mere P800 per person, the fee surged tenfold to P8,000. In addition, NNIC said that a new set of guidelines is in place for very important persons (VIPs), important persons, and passengers requesting the VIP service at NAIA.
The changes were made shortly after Manila International Airport Authority (MIAA) transferred the operations and management of NAIA to NNIC, which comprises the RMM Asian Logistics Inc., RLW Aviation Development Inc., Incheon International Airport Corp., and led by Ramon Ang’s San Miguel Corporation. MIAA has been serving as a “regulator,” overseeing NNIC’s compliance with the terms and conditions of their contract, since the turnover last September 14.
On September 16, just two days after NNIC took over, the consortium paid the government P30 billion upfront, according to the Department of Budget the following day. The payment was released by NNIC in March and was set to clear after their takeover. The group will also pay a fixed P2 billion annual payment on top of the 82 percent national government share to revenues from operating NAIA, “excluding passenger service charge.”
Ang’s group won against two companies in a public bidding for the NAIA modernization project last February. It offered the largest revenue share to the government at 82.16 percent. Furthermore, NNIC committed to investing P170.6 billion in transforming the 76-year-old airport complex into a world-class facility during its 15-year concession. The huge investment is projected to generate a revenue of P1 trillion for the government.
The project is one of the fastest “solicited PPP project (Public-Private Partnership) of the Philippine government,” taking only one year to develop, according to Transportation Undersecretary Timothy John Batan after Ang’s SMC group won.
Related story: Ramon Ang group takes over NAIA, promises improvements by Christmas
For a ‘seamless and efficient’ airport
NNIC initially announced the markups during the Economic Journalists Association of the Philippines Forum in Makati on Sept. 9. General manager Angelito Alvarez said that the rates are “based on the Administrative Order that was recently signed.”
MIAA Revised Administrative Order 1, Series of 2024 states that the passenger service charge will be raised to P950 (international) and P390 (domestic). Any new adjustments in the fees will be made in the 7th and 12th year of NNIC’s management and the 17th and 22nd year, should the contract be extended.
Alvarez stated that it is “very important” for NNIC to collect higher fees as “82 percent of the revenues under the passenger service charge will go to the government.”
According to MIAA’s 2022 Annual Report, NAIA earned P2.8 billion from terminal fees and P3.7 billion from landing and parking fees that year. This comprises two-fifths of the airport’s gross operating income of P9.8 billion. From the amount, P1.4 billion was remitted to the government as part of MIAA’s commitment to provide 50 percent of its total income to the institution. The amount is starkly different from NNIC’s 82.16 percent revenue share to the government.
In the same year, 31.17 million passengers passed through NAIA terminals. The following year, 2023, the number went up to about 45.33 million passengers, but still below the pre-pandemic figures of 48.1 million in 2019.
The fee hikes would help NNIC recover its investment and finance NAIA’s rehabilitation, according to Department of Transportation (DOTr) Secretary Jaime Bautista.
“There are countries that are collecting higher than the new rates. I think the reason for this is for us to be able to generate revenue, especially the concessionaires, for them to be able to finance the infrastructure requirements to modernize the airport,” Bautista said during the 2024 Aviation Summit held in early October.
The controversial parking fees
Meanwhile, NNIC increased parking fees to “prioritize passengers” in NAIA’s covered parking building. “Many individuals, including those from nearby establishments and with no airport-related business, were taking advantage of the low rates for overnight or long-term parking. This created parking shortage for actual passengers, adding to congestion and frustration,” NNIC said.
“The new rates are specifically designed to discourage non-travelers from using the airport for long-term parking and ensure that passengers have access to the parking they need, when they need it,” the operator added.
With the increased parking rates, NNIC expects that there will also be a decrease in vehicles circling the airport to search for spaces, therefore easing the flow of traffic.
The VIP service is not just for dignitaries or well to do. What about the elderly or persons with disabilities who need family members to be with them until the last possible minute before their flight—or to meet them when they land at NAIA?
That may be so, but for passengers going home to their provinces on a weekend or local tourists visiting our island destinations for two nights/three days, that means an additional P2,400 in their budget; for a long domestic or international weekend, that’s P3,600 for three nights/four days. While there are private parking facilities such as Park ‘N’ Fly, which charges P595 for the first 24 hours, frequent flyers are speculating that they might soon follow NAIA’s price increase.
As for the price hike of VIP services, NNIC stressed that the service is only intended for dignitaries and other important individuals, but was easily accessible to anyone who could pay the minimal amount of P800.
“For that amount, any passenger could bypass regular airport procedures,” NNIC said. “This not only created potential security vulnerabilities but also led to operational inefficiencies and an unfair advantage for those who could afford to pay.”
The move adheres to the best practices and standards set by the International Civil Aviation Organization (ICAO), wherein “premium services are priced at a higher rate, to limit requests while ensuring availability for those who really require them.”
The VIP service price adjustments, along with other fee hikes, are part of NNIC’s “ultimate goal” to “create a seamless and efficient airport experience where the need for VIP treatment becomes unnecessary.”
But what about the elderly or persons with disabilities who need family members to be with them until the last possible minute before their flight—or to meet them when they land at NAIA? Not every senior citizen or PWD can afford the P8,000 fee.
Set by the government prior to NNIC takeover
Apart from passenger fees, other airport fees such as landing and takeoff charges and cargo terminal fees, have already increased on the first month NNIC took charge of NAIA’s operations. The company clarified in a social media post that the fee hikes were set by the government prior to its takeover.
“All fee adjustments were pre-determined and set by the government and its financial adviser for the Public-Private Partnership project, the Asian Development Bank (ADB),” the post read. “NNIC has no hand in setting the fee adjustments.”
Ang elaborated on this during an interview at the signing of the concession agreement in Malacañang last March: “The fees were set by ADB, so I cannot increase anything except for the ones they planned to. They already have a list of services they’ll set the right prices for; they’ll just align it with the standards of neighboring countries.”
Meanwhile, Bautista called Bilyonaryo’s report—alleging that the increase was a unilateral decision by the DOTr—a “false statement.” In a statement sent to local media on Oct. 4, the transportation secretary said that fee hikes were, in fact, discussed in several Cabinet meetings and were even supported by President Ferdinand Marcos Jr.
“The report said that we approved the rates without prior approval from Cabinet. It passed through Cabinet meetings. We had many Cabinet meetings to discuss this,” he stressed.
As for the increased parking rates, NNIC said that the adjustments were issued by MIAA before the consortium took over the operations of the country’s main gateway.
NAIA’s P170.6B rehabilitation
NAIA has not changed its fees in the last 24 years which, according to NNIC, hindered the airport’s modernization and aided its decline. “With adjusted fees, passengers will benefit from an improved overall experience,” the operator wrote on social media.
Bautista reiterated that the fee hikes will not only enable NNIC to recoup its P170.6-billion investments but more so, benefit travelers. “With the investments that they will do, the charges that they will collect, our airport’s efficiency will greatly improve,” he said in a press con in July. “From 32 million capacity, NAIA will soon be able to accommodate 60 to 62 million travelers.”
NNIC committed to implementing initial improvements in NAIA’s maintenance in the first six months of its takeover and more significant enhancements in the next four years. SMC, as the lead of NNIC, will execute the plan in three phases: improvement of existing facilities, followed by intensive enhancements to the airfield and terminals, and the final phase, which is the refurbishment of air traffic control.
Ang said that the project will commence with the refurbishment of NAIA’s air conditioning system and the improvement of its housekeeping which includes the renovation of comfort rooms, additional seating capacity at passenger terminals, as well as repair of calculators, escalators, and elevators, among many others. All these will take place from September this year to March 2025, “before Holy Week,” Ang noted.
However, in an unlikely turn of events, NAIA already faced two maintenance issues a month after NNIC took over the airport’s operations.
On Oct. 22, passengers who flew from Terminal 3 experienced significant delays in getting their checked-in luggage when they had already reached their destinations. According to NNIC, all 821 bags were left behind because the screening device linked to its 20-year-old luggage handling system malfunctioned.
NNIC then said that they had already procured a new, advanced baggage handling system to replace the old one. Additional measures will also be implemented to enhance the new system’s efficiency. Meanwhile, passengers affected by the issue were given the option to pick up their bags at the airport or have them delivered to their destinations.
The following day, on Oct. 23, NAIA Terminal 1 faced a water supply outage that affected restrooms, restaurants, and other facilities in the area. Damage to the main water pipe caused the interruption, according to NNIC. “The pipe sustained a one-meter crack following the resumption of water service after a scheduled maintenance at Maynila’s Pasay plant, which lasted 17 hours, from 12 midnight to 5 p.m. of Oct. 23,” the operator said.
NNIC’s quick workaround was to deploy water tankers to ensure steady water supply while the main pipe was being repaired.
In addition to its plans to improve airport maintenance, NNIC vowed to boost the airport’s free Wi-Fi, which the group already did when it partnered with PLDT Inc. and Converge ICT to boost the Wi-Fi’s average speed from 50 to 60 Mbps to a peak of 115 Mbps, with 1,000 users connecting to the network every hour.
The improvement of NAIA’s infrastructure is also in the pipeline, with NNIC planning to construct a new expressway that connects Terminal 3 to NAIA Expressway and Pasay by next year. “The traffic going to NAIA is very bad,” Ang said. “That is why we’ll be constructing a new expressway connecting NAIA Skyway to Terminal 3. So from Skyway, you can go to Terminal 3 directly in about 10 minutes. Then from Terminal 3, passengers can easily go to NAIA Skyway in five minutes. We’ll create a three-lane access which also connects to Pasay.”
Further reformations will be done through the construction of a new terminal which aims to decongest foot traffic in Terminals 1, 2, and 3. “We’ll be building a new terminal with 50 boarding gates in two to three years,” Ang said. “Most of Terminals 1, 2, and 3 are being occupied by offices when the spaces should be for the passengers. The new terminal will definitely improve the airport.”
In addition, NNIC is eyeing to renovate NAIA’s intersecting runways to make them “semi-independent” and increase aircraft takeoff from 40 to 48 per hour.
NNIC has begun taking its infrastructure rehab plan off the ground with the upcoming closure of Terminal 4. NNIC announced on Oct. 12 that it is closing the terminal “to address its aging infrastructure and improve overall passenger experience.” Renovations will commence on Nov. 6 and are expected to end in February 2025.
This will be followed by terminal reassignments that NNIC plans to implement gradually over three years. Last September, Alvarez announced that Terminal 1 will be exclusive to Philippine Airlines (PAL), while Terminal 2 will serve domestic flights for both PAL and Cebu Pacific. Terminal 3, on the other hand, will accommodate all international carriers while Terminal 4 will be for the sole use of AirAsia.
The rearrangement will take place alongside upgrades to the equipment, as well as the safety and security systems of all terminals. This includes passenger processing systems, baggage handling, and passenger boarding bridges, among many others.
For years, NAIA has been one of the world’s worst airports, according to surveys, and studies conducted by several online platforms (including BusinessFinancing.co.uk and luggage storage app Bounce). NNIC will manage NAIA in the next 15 years, extendable by 10 years depending on its performance.
We’ll just have to wait and see if the increased fees will really go to making NAIA a world-class airport that will transform not only the country’s mobility infrastructure, but also the Philippines’ image and economy.
