More fun while it blasted

27 August 2015

By Conrado R. Banal III

Those UAE airlines flying to Manila–but not to any of other international airports in country such as Clark or Cebu or Davao—must be having a lot more fun in the Philippines.

Those airlines simply demanded that the Philippine government should give them 26 additional flights per week right smack in the middle of the air traffic-infested Manila airport, which would really be a blast to them, because these would be on top of the 28 flights per week that they have already been enjoying for the longest time.

From what I gathered, the Philippine aviation authorities seemed to be ready to give in to the onerous demands of those airlines, namely, Emirates Airlines of Dubai and Etihad Airways of Abu Dhabi.

But of course the two Filipino airlines flying to the Middle East, flag carriers Philippine Airlines and Cebu Pacific, frowned upon the demand on the Philippine government made by those two foreign airlines.

If the Aquino (Part II) administration would give in to the pressure from those airlines, Emirates and Etihad would each have more than 25 flights per week to Manila, and the locals PAL and Cebu Pac reasoned that it would only mean certain death for them.

But surely the question would have to be, well, did our leader Benigno Simeon, aka BS, even know all about this deal happening behind his back?

Only a few months ago, the United Arab Emirates pushed for the new round of air talks with the Philippines, giving as their most compelling reason that the existing air agreement between the two countries was already obsolete being… well, two years old.

In the existing air agreement crafted in 2012, those two airlines, Emirates and Etihad, already succeeded in doubling their flight entitlements to the Manila airport, thus giving them 14 flights each.

And now, two years later, they want more!

In comparison, PAL had 14 flights per week to the Emirates, while Cebu Pacific had seven flights per week.

Anyway, our dearly beloved Tourism Secretary Ramon Jimenez Jr. revealed that the government would “give in”—his exact words—to the demand by the UAE government for the new talks, implying that it would be good for Philippine tourism.

But as it turned out recently, the Philippine government would not only be giving in to the holding of talks but also would be giving away all the flight entitlements that those two UAE airlines demanded.

And what would the local airlines get? Well, it seemed that the side of the local airlines happened to be not part of the main agenda in the new air talks. Talk about “reciprocity”!

Question: Did we ever have a pressing, matter-of-life-and-death need for the additional 28 flights of those UAE airlines to Manila?

As I said, at 14 flights per week each, the two UAE airlines already enjoyed 28 flights per week, while PAL and Cebu Pacific, together, had all of 21 flights per week.

Just how big the UAE market was and would ever be, perhaps could be gleamed from the official statistics supplied by that country, showing that the total population of the UAE happened to be all of 1.4 million people.

That was not even anywhere close to the estimated number of OFWs at more than 10 million already and still counting.

Thus the locals feared, and rightly so, that those new entitlements, if given by the administration to the foreign airlines, would only bleed the local carriers.

For one, the locals used their own capital, while based on reports abroad, those UAE airlines wallowed in government subsidies to the tune of $42 billion, in the form of cheap loans, cheap airport services and even outright cash.

Other governments, such as the US, Canada and Europe, already made a lot of noise over the subsidies enjoyed by those airlines from their government, with some NGOs even calling the $42-billion subsidy as just the “tip of the iceberg.”

European countries like the Netherlands, France and Germany already blocked the UAE airlines from getting new flights to any of their areas, because subsidies would make it easy for the UAE airlines to steal customers from other airlines.

Notice that the subsidized Middle East airlines already became so dominant in the Europe-Asia Pacific routes that most European carriers abandoned direct flights on those routes a long time ago.

Like it or not, subsidies would never be good for competition. In the case of the Philippine carriers, the Middle East and European routes were the virtual monopolies of Emirates and Etihad. PAL and Cebu Pacific only started to go on those routes only two years ago. The result was immediate cutting down of rates.

That was the biggest reason that the local carriers had to oppose the Aquino (Part II) administration’s grant of flight entitlements to the UAE airlines, because it would be unfair subsidized competition.

The last time I checked, monopoly was not good for competition; it would thus be criminal to burden our OFWs this way.