It's all about Unfair Competition
September 23, 2011
THE country’s two biggest air carriers are asking the government to
modify Executive Order (EO) 29, which adopted an “open skies” policy for
the country, to include reciprocity in any air rights negotiations.
Airline officials said they need reciprocity to compete fairly with international carriers.
“The
initiative of the open skies policy is good as it opens secondary
gateways to air carriers but apart from allowing foreign air carriers to
enter the Philippines, the government should also increase the air
access rights of Philippine carriers, country by country,” said
Philippine Airlines assistant vice president for government affairs Jose
Perez de Tagle at the sidelines of the Department of Tourism’s Open
Skies Policy roadshow last Monday at the Cebu Grand Hotel.
De Tagle said that while EO 29 grants unlimited rights to
foreign air carriers to fly in and out of the country, it left
Philippine air carriers limited flights specified in existing air
agreements with other countries. He said this threatens their
existence.
“Let the foreign carriers fly but give us the same
opportunity,” he said, adding that a two-way open skies policy will help
the country attract a large number of tourists.
Fair rules
“All we want is for the government to set fair rules for all players,” he said.
De Tagle said fair rules should be imposed on air carriers,
especially that they have been pouring investments into the country and
have remained strong and competitive in the industry.
“In fact, we are building airlines and not asking for government subsidies,” he said.
EO 29 was signed by President Benigno Aquino III in March this
year. It authorizes Philippine aviation panels to offer and promote
“third, fourth, and fifth freedom rights to the country’s airports other
than the Ninoy Aquino International Airport (NAIA) without restriction
as to frequency, capacity and type of aircraft, and other
arrangements” that will serve the national interest as may be determined by the Civil Aeronautics Board (CAB). It said that the CAB can grant any foreign air carriers
increases in frequencies and capacities in the country’s airports other
than NAIA.
It also noted that the 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. This means, that if foreign carriers fly people to Cebu, it
can’t fly passengers from Cebu to anywhere in the country. Domestic
aviation will still be primarily handled by local carriers.
But de Tagle said that such a condition is like telling the local airline firms to kill the international business.
EO 29 was signed together with EO 28, which ordered the reorganization of the air negotiating and consultation panels.
Cebu Pacific, on the other hand, said they will continue to push for two-way open skies.
“Since the beginning, we have made it clear that we will never
support one-way open skies, which is what EO 29 represents. With
one-way skies, the Philippines gives foreign carriers unlimited access
to our airports, while our own carriers get nothing in return,” Cebu
Pacific in a statement said.
Hong Kong carriers, for example, can now mount as many flights
as they like to Cebu, while Philippine carriers are limited to 2,500
seats per week. The airline added they are confident to compete with any
carrier, domestic or foreign, so long as there is a “true open skies
policy,” where there is reciprocity and level playing field.
Low fares
“Cebu Pacific is investing billions of dollars in the country
and employs thousands of Filipino workers and professionals. We help
guarantee increased tourists because whenever we enter a route, we lower
air fares in the market. Tourists benefit from the year-round low fares
that we provide. But if we can’t compete, we can’t lower air fares,”
the airline said.
The DOT is holding an open skies policy roadshow nationwide to inform the public on the benefits and advantages of EO 28 and 29.
Laywer Jose Claro Tesoro, the resource speaker during the
roadshow, told industry stakeholders that the recently signed EO 29 is
“just the beginning” of an improved tourism industry in the country. He
said that opening the secondary gateways would boost tourism in regional
destinations.
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