What Reciprocity?

EO 29 Makes foreign Airline unlimited flight,
Local Airlines on the limits!

March 21, 2011

President Aquino doesn't seem to understand what reciprocity is all about when he signed Executive Order No. 29 which liberalizes the Philippine aviation industry by easing restrictions on foreign airlines in flying to international airports outside Ninoy Aquino International Airport.

For while the Civil Aeronautics Board (CAB) cannot grant any foreign air carrier Cabotage traffic rights, or the right to transport passengers and goods between two or more points within the Philippines, the said Executive Order failed to consider Bilateral Air Agreements which limit Philippine carrier from flying to the foreign airline's country.

As Cebu Pacific pointed out, Hong Kong carriers, for example, could now mount as many flights to Cebu but domestic airlines flying to the Chinese Territory are allowed only 2,500 seats per week.

Another interesting example is the key destinations to China. From the said EO, Chinese carriers would be able to fly from any of its major cities to Kalibo, but Philippine carriers are denied such an access by the Chinese authorities.

The new EO will focus on the following secondary gateways. They are:

1. Laoag International Airport (Luzon)
2. Diosdado Macapagal International Airport (Luzon)
3. Puerto Princesa International Airport (Palawan)
4. Subic Bay International Airport (Luzon)
5. Kalibo International Airport (Panay)
6. Mactan International Airport (Cebu),
7. Davao International Airport (Mindanao)
8. General Santos International Airport (Mindanao)
9. Zamboanga International Airport (Mindanao)
10. Bacolod Airport (Negros)

Of the ten airports, the Civil Aviation Authority of the Philippines (CAAP) listed only 9 airports having customs, immigration, quarantine and security (CIQS) facilities.

The most affected on this move is Zest Air which has been trying desperately in years to secure more seats to Korea and China's major cities but yielded only a few additional entitlement, while the open skies policy of the Aquino government technically opens unlimited rights.

“We want the same benefits from the governments of these foreign airlines. We want reciprocity, which is fair and reasonable. We are not asking for special favors — just a level playing field," says Cebu Pacific.

Cebu Pacific is the first airline to protest such move and is urging the Aquino administration to revise the open skies policy, saying it will only benefit foreign airlines.

Philippine Airlines and Zest Air are preparing similar actions.

“If the benefits of air services liberalization flow only one way, we are discriminated against in our own country," says the airline.

The government thought differently however.

Opening Philippine skies to foreign airlines is a way for the administration to boost the country's tourism and investments, Executive Secretary Paquito Ochoa Jr. said in a statement.

"By empowering the CAB to allow foreign airlines to fly directly to airports other than the NAIA, the government hopes to encourage these airlines to fly to other destinations in the country and make it easier for foreign guests to visit the archipelago's top tourist attractions," says Ochoa.

Philippine Airlines had been advocating for its reciprocity. PAL senior assistant vice president for external affairs Maria Socorro Gonzaga said there are 47.4 million seats available to foreign and local carriers but only 23 percent or 10.97 million seats are filled up because none of the foreign airlines would fly to the secondary routes promoted by President Aquino.

"It's not the number of airline seats that is behind the lack of tourist interest in the Philippines but the country's image abroad" Gonzaga said.

Citing for example seat entitlements to Clark International Airport in Pampanga which is about 25.6 million; to Cebu, 20.7 million; to Davao, 20.3 million; and to Kalibo, Bohol, Palawan, and Laoag, 19.6 million. None of

While there are 21.2 million seat entitlements in Manila which are almost fully filled.

By all accounts, airlines are interested in flying just one route or two. And they are covered by bilateral air service agreements.

Civil Aeronautics Board however clarified that there is no need to amend the EO since the reciprocity of air rights is implied in all presidential order.

"Even if the EO don't say that, we can assert reciprocity because it is subject to existing and higher laws such as the Constitution," said Atty. Carmelo Arcilla.

Arcilla said that CAB negotiate air traffic on a case-to-case basis dampening fears echoed by local airlines.

Along with the Executive Order (EO) on "pocket" open skies policy, President Aquino also signed an EO 28 which removed airlines from the Philippine aviation negotiating panel and reorganized the Philippine Air Negotiating Panel and the Philippine Air Consultation Panel.

The negotiating panel will be responsible for initial negotiations that will lead to the conclusion of air services agreements.

The EO has designated the Department of Trade and Industry (DTI) secretary as chairman of the panel, and members would include the executive director of the Civil Aeronautics Board (CAB) and representatives from the DTI, the Department of Transportation and Communication (DOTC), and Department of Tourism (DOT).

Local carriers such as Philippine Airlines and Cebu Pacific, which used to be members of the panel, were removed from the list.

On the other hand, the consultation panel, which will be responsible for succeeding negotiations of the air agreements, will be headed by the DOTC secretary and CAB executive director as chair and vice chair, respectively. Members will come from the DTI, DOT, Department of Foreign Affairs and the Department of Labor and Employment.

President Aquino signed on March 14 EO 28 and EO 29, with the latter authorizing the CAB and the aviation panels to pursue more aggressively the liberalization of the country's international airports, except for the main gateway Ninoy Aquino International Airport (NAIA).

1 comment:

  1. What about Iloilo airport in S.Barbara why it is "out"?