Secrets of UAE Negotiation Revealed

1 September 2015 

By Federico D. Pascual Jr.

Veiled threats
Last Thursday, the UAE chief negotiator, Omar bin Ghaleb, opened the air talks by castigating the Philippine panel. He poured out his disappointment over seeing “joint statements” in the newspapers issued by the major Filipino airlines.

This has never happened before, he told the Philippine panel, threatening to report the affront to his superiors in Abu Dhabi.

The Philippine chief negotiator, DoTC Undersecretary Jose Lotilla, replied that the Philippines is a free country with a free press, and that the government cannot restrict citizens, including airlines, from making statements. Needless to say, the opinion of Filipino airlines is not necessarily shared by the government.

Throwing in more veiled threats, the UAE negotiators mentioned the thousands of Filipinos employed by UAE airlines, as well as overseas Filipino workers in the UAE (one official said there were 900,000, while another one claimed “millions”).

That did not go well with the Philippine side, as some felt the UAE was threatening to stop or slow down hiring of OFWs if their demands were not granted.

(Hint from history: Some years back, the UAE booted out Canadian soldiers from one of their military bases after Canada refused to accede to the demand of Emirates Airlines for more entitlements to Canada.)

What exactly does UAE want?

THE UAE was demanding more flights to Manila than just the 14 flights per week usually cited in the media, even as high as 28 to 56 additional flights per week.

The discussions dragged on to almost midnight, with UAE holding out for more flights than the seven that the Philippines was prepared to give (and finally gave).

But the foreign airlines resisted the condition proposed by the Philippines that UAE airlines must also fly directly to Clark or Cebu as a price to pay for receiving and using new entitlements to serve Manila.

The UAE’s reluctance led to the watering down of the Cebu/Clark condition. Now the UAE airlines, such as Emirates or Etihad, have one year to meet this condition. They also demanded a chance to postpone this further if they present valid reasons.

Why did the Philippine side accept this weakening of a core pro-Filipino position?

Was it too willing to close a deal with UAE at any cost? The panel owes the people an explanation.

Etihad Airlines (the UAE flag carrier based in the capital, Abu Dhabi) walked out at one point. It was sore that the Philippines seemed to be favoring Emirates, its chief rival and fellow UAE carrier. Etihad returned to the table that same day.

It seems the UAE government promised to split any new entitlements more or less equally between Etihad and Emirates. The final split appears to be four for Emirates and three for Etihad.

Why does Emirates get the upper hand? Did not the CAB rebuke them in late 2013 and early 2014 for operating illegal flights to Manila without the express approval of the board, slapping it a fine of more than P1 million for the deception?

Curious sidelights

Philippine carriers (Philippine Airlines, Cebu Pacific and Zest Air/Air Asia) are rivals, but they were so distressed over developments that they issued together an ultimatum to protest the Philippine panel’s willingness to give in to some UAE demands.

After this show of force by the local airlines, the Philippine panel somehow displayed a little more backbone and started pushing back UAE. Were it not for this, the final agreement would have been more detrimental to the national interest.

Note that Zest/Air Asia did not join Cebu Pacific and PAL when they issued joint statements before the negotiations. But the goings-on in the talks must have been so bad that Zest/Air Asia felt compelled to stand with its two biggest rivals.

The seating arrangement itself was suggestive. Filipino airlines were assigned seats on the periphery of the meeting room, while government officials (DoTC, CAB, DoT, DFA and DTI) occupied the main table on the Philippine side.

In contrast, at the main UAE table Emirates and Etihad sat on the right and left flanks of the chief negotiator and members of the UAE, Dubai, Abu Dhabi and Sharjah government authorities for civil aviation.

The agency with the most number of representatives, after the Civil Aeronautics Board (whose staff handled secretariat functions), was the Department of Tourism that had at least five reps. Reward for bringing in less than 20,000 Emirati tourists last year?

It was revealed that Cebu Pacific was kicked out of Dubai airport for two months in 2014, when one of the runways needed repairs. While CebuPac was forced to use neighboring Sharjah airport, Emirates was not required to transfer its Dubai-Manila flights to Sharjah.


  1. This is so juicy that it now borders tabloid journ. Can you refer us to other articles to back this up?

  2. There was none. The source from our perspective is credible. We were told the same story by people who were there inside publishing info in twitter and facebook in real time. It was just better for us to publish article from the second largest newspaper in the country. Really unfortunate that the source of this information happens to be inside the boardroom. We lived and practice free speech here in the Philippines even if what they say is confidential, as long as negotiations start to be controversial. There are always good people willing to talk the controversial side.

  3. If I was in charge from the Filipino CAA side, I would given EK its wish for a 3rd daily flight provided all 3 flights are only operated by an aircraft no bigger than their B77Ls in the future (which they will be ordering many of). In this way, EK gets its 3rd flight but overall capacity reduces as its current double daily B77Ws seat 854 pax where as 3 daily 266 seater B77Ls would 798 ! For Etihad, I would have also said the same i.e. go ahead with 3rd daily MNL-AUH but only using A332s exclusively which would mean 786 seats daily versus the current 824.

    As far as CEB is concerned, I feel EK can make it work with an aircraft the size of the B77L but not anything larger. EY has no hope in CEB as it does not know how to sell such destinations properly (others include LOS & CMN).

    EK and EY both want extra MNL rights not to feed their home market but rather to feed their EU and MENA flights in particular which need more help especially with regards to EY's case. Filipinos worship Cathay Pacific and then Singapore Airlines for a good reason because of their high on board product quality and service. EK is # 3 by a distance though in their eyes !