MNL Still Closed for ASEAN Integration

18 September 2015

PHL delaying Asean open skies

By Ma. Stella F. Arnaldo

THE Philippines remains as the last holdout to signing the open-skies aviation policy for the Association of Southeast Asian Nations (Asean), one of the key measures to ensure air connectivity and increased visitor arrivals in the region.

Aileen Clemente, president of the Asean Travel Association (Aseanta), made this revelation during the recent Third Philippines Tourism Forum, and urged the Aquino administration to ratify the policy immediately. “Our signing is, first of all, symbolic—that we are already willing to be taken as Asean and that [we are prioritizing] economic benefits over protectionism,” she later told the BusinessMirror.

She added that being an archipelago, the country “will need connectivity with our neighbors as we grow tourism in the Philippines, as well as trade and business.”

Clemente, who is also president of Rajah Travel Corp., noted that the goal of Asean’s current tourism strategic plan is to “provide an increasing number of visitors to the region with authentic and diverse products, enhanced connectivity, a safe and secure environment, increased quality of services, while, at the same time, ensuring an increased quality of life and opportunities for residents through responsible and sustainable tourism development by working effectively with a wide range of stakeholders,” by 2015.

The Aseanta, is a nonprofit tourism association formed in 1971, which is composed of public and private tourism sector organizations from the Asean, such as national tourism organizations (e.g., the Philippines’s Department of Tourism), airlines, travel associations, and hotel and restaurant associations. One of its goals is to support and help implement the Asean strategic tourism plan—a road map to ensure that the region remains a successful tourism destination.

The Department of Transportation and Communications, however, could not say when the Philippines would ratify the said policy, which should have been implemented this year, in preparation of the integration of Asean into one economic community.

In a brief text exchange with Transportation Secretary Joseph Emilio Aguinaldo Abaya, he said “a check with the Office of the President is that the Department of Foreign Affairs [DFA] has some modification on the ratification document.”

Asked what these modifications were, he said: “To make clear that the protocols are subject to slots in Manila, which I understood from the start is written into the agreement.” The protocols refer to opening up third, fourth, and fifth freedom rights for foreign carriers flying into capitals, for instance, the Ninoy Aquino International Airport (Naia) in Manila.

But he stressed that “clearly the decision and policy of government is ratification,” but failed to say when this would happen. Abaya said he would follow up the issue with the DFA.

Clemente, countered however, that “the excuse that there are no slots in the Naia is isolated from the principle of open skies.” She pointed out that Indonesia already signed [the protocols] even if the Jakarta airport currently doesn’t have slots to provide [foreign carriers].”

About half of the Asean population of 600 million lives in Indonesia, making it an important signatory to the region’s open-skies protocols.

The DOTC chairs the Philippine Air Consultation Panel, which negotiates air-service agreements with other countries. While the Aquino administration continues to protect Manila, it frees up flying rights of foreign carriers in secondary cities or other provincial capitals

The Asean open-skies policy, or Asean Single Aviation Market (Asean-SAM), guarantees third and fourth freedom rights, which allow carriers to fly from their home country to another foreign country, sans government approval.

It also ensures fifth freedom rights, allowing any carrier to fly between two foreign countries during flights originating or ending in said airline’s home country. This means, a Philippine carrier can offer return flights between Manila and Kuala Lumpur, then onward to Bangkok.

The document is silent on seventh freedom rights that will allow a carrier to fly between two foreign countries, even if said carrier isn’t offering flights in its home country.

Even Tourism Secretary Ramon Jimenez Jr. expressed support for the Asean open- skies policy, saying it would afford greater connectivity in the region and benefit the Philippines. In a text message, he said: “Absolutely. I believe that, with the right preparation, the Philippines could benefit in terms of tourist arrivals. Anything that makes it easy/efficient for people to get to, pass through and leave from the Philippines will add to arrivals. Whether our airlines are prepared to compete on this basis may be another story.”

Clemente stressed further that it was time for government to think of the economic benefits of signing on to the Asean-SAM. “Connectivity is inclusive of intra- and inter-country and islands. If the current hub for air traffic is mostly connected via Manila—that’s where most foreign carriers can go. But if it can also be allowed that all carriers can pick up from multiple points within the Philippines, this then becomes economically beneficial and assists in the decongestion of one airport.”

She added that if the government’s goal is to make the Philippines a major tourism destination in Asean and the world, then all its regulatory agencies must support that one common vision. “Our goals should be beyond our businesses and be beyond the scope of each department in government, but rather, everyone must take one vision, one goal and work around it even if it means it gives up turfs or current areas of responsibilities—all these, bearing in mind, that we need safe, secure and seamless travel [to and around the islands].”

The 10 members of the Asean are Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Asean open skies will go on sans Manila OK
IT’S embarrassing.

This was the reaction of aviation expert Avelino Zapanta to the Philippines’s continued protection of Manila from foreign carriers, despite the rest of the member-nations of the Association of Southeast Asian Nations (Asean) agreeing to open up their capital cities.

“Nakakahiya nga, but it won’t stop the Asam [Asean-Single Aviation Market],” he opined. ASAM takes full effect in December 2015, as Asean becomes one economic community.

Zapanta, author of 100 Years of Philippine Aviation 1909-2009, the definite reference on airline management in the Philippines, also said the Asean open-skies policy will spur local airlines to offer more intra-Asean routes.

“I think some Philippine carriers will take advantage of Asam, like Cebu Pacific. It has the resources and it is aggressive. It has ordered more ATR72s, ideal for the noncapital cities of the other Asean countries, e.g., Zamboanga to Sandakan and Puerto Princesa to Kota Kinabalu, among many others. I think, PAL Express will do so, too. But the most aggressive will be Air Asia Zest, since Asam is right down the group’s alley.”

The Philippines continues to stall on the ratification of Protocols 5 and 6 of the 2009 Multilateral Agreement on Air Services (MAAS) that would give Asean airlines unlimited third, fourth and fifth freedom rights to operate between capital cities.

Zapanta, who is also president of the Southeast Asian Airlines International, a charter service, said the Civil Aeronautics Board “has proposed the ratification of Protocols 5 and 6, but it has not been acted upon by the President [Mr. Aquino].”

For its part, pioneering flag carrier Philippine Airlines (PAL) supports the Aquino administration’s protection of Naia in Manila, the main gateway of tourists to the Philippines, due to its congested runways and terminals.

But it added that it supports ASAM, as it opens up secondary airports as other tourism gateways to the Philippines.

In an e-mail, airline President and COO Jaime J. Bautista said: “PAL has supported Asean open skies as a way of stimulating the opening of direct airline routes to the Philippines’s tourist gateways. With PAL’s support, the Philippines ratified Asean open skies several years ago for services to all Philippine airports, except Naia; and, thus, any Asean airline can operate nonstop from any airport in the Asean region to Cebu, Clark, Davao, Laoag, Laguindingan, Bohol, Iloilo, Puerto Princesa and any other secondary airports in the country.”

He added: “The remaining obstacle is Manila, because the runways, terminals and facilities at Naia are currently overstressed in handling existing flights, much less any significant expansion of flights under any kind of open-skies arrangement. The government has rightfully held back from including Naia in the ratified Asean open- skies agreements, and, indeed, there is much work to be done to expand Naia or develop a new Manila airport before the Philippines could consider meaningful open skies. In the meantime, Asean airlines can serve the capital by flying to Clark.” Aileen Clemente, president of the Asean Tourism Association (Aseanta), earlier said the issue of having no more slots in Manila for foreign carriers and the principle of open skies should be separate from each other. She pointed out that “Indonesia already signed [the protocols], even if the Jakarta airport currently doesn’t have slots to provide [foreign carriers],” making the Philippines the last holdout to the region-wide agreement.

Aseanta is composed of public and private tourism-sector organizations from the Asean, which help implement the Asean strategic tourism plan—a road map to ensure that the region remains a successful tourism destination.

Zapanta, for his part, believes the rest of Asean will not press the Philippines to fully open its main gateway to foreign carriers, even if it will be the remaining country, which will continue to do so. “The other members of Asean will respect the limitation we imposed in the non-ratification of Protocols 5 and 6. They have the option to reciprocate the restriction, i.e., not giving the Philippines unlimited third, fourth and fifth [flying rights] in their capital cities, and keep within bilaterally agreed level of such traffic rights.”

Third and fourth freedom rights allow carriers to fly from their home country to another foreign country, sans government approval.

Fifth freedom rights allows any carrier to fly between two foreign countries during flights originating or ending in said airline’s home country.

Meanwhile, PAL said it was willing to compete under the ASAM but urged other Asean member- nations to privatize their flag carriers to make competition more equitable in the region.

“PAL is always able and willing to compete with airlines in Asean and all over the world,” said Bautista. “In Asean we’ve advocated a policy for each member-state to take the bold leap to privatize their flag carriers, so that their airlines can progress from state ownership and dependence to become normal business enterprises. That would make it more fair or equitable, as the Philippines is the only Asean member-state to have made those bold moves more than two decades ago.”

The 10 members of the Asean are Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.