PH airlines press reciprocity in ‘open skies’

MANILA, Philippines—Local airlines have criticized the government’s “open skies” policy, saying the disregard for reciprocity from other countries may jeopardize the growth of Philippine carriers.

The Civil Aeronautics Board (CAB) last week approved the final implementing rules of Executive Order No. 29—signed by President Aquino in March—which removed legal restrictions on the number of flights foreign airlines could mount to local cities outside Manila.

The government is hoping that the more liberalized rules would spur the growth of the country’s tourism sector—considered a pillar of the administration’s economic platform.

Budget carrier Cebu Pacific said in a statement issued on Friday that it was “disappointed” that the government did not heed its calls for rights given to foreign airlines to come with the condition that the same rights be granted to local carriers by other countries.

“We have expressed our concerns on reciprocity right from the start. Regrettably, none of our proposed amendments that would have produced fair competition and enshrined reciprocity into the implementing rules and regulations were adopted,” Cebu Pacific said.

In the final rules, under normal circumstances, the CAB will require that any air rights given to foreign airlines should also be given by foreign governments to local carriers.

However, the need for this would be waived if letting foreign airlines serve a particular route was in accordance with “national interest and mutual benefit.”

Cebu Pacific said this would be an unfair advantage for foreign airlines.

“We strongly believe that the Philippine airspace is a valuable asset and should be used to further the long-term interest of the nation through mutually beneficial air agreements,” the company said.

“We can compete with foreign carriers if given a level playing field of equal and reciprocal traffic rights. This level playing field is vital for [our] continued viable existence,” it added.

In a separate interview, Alfred Yao, chairman of Zest Airways, said the government should protect the rights of local airlines, which have invested billions of pesos and hired thousands of people to expand operations in the past few years.

“We welcome additional competition because it will grow the market for all airlines. But we should put everything on equal footing with foreign airlines,” Yao said. “We are giving out something that’s very precious. We should get something too.”

He said the additional competition from foreign airlines might hamper Zest’s own expansion plans. Earlier this year, the company announced plans to acquire two Boeing 777 aircraft, which are capable of long-haul flights to the Middle East, Europe or even the United States.

But leisure carrier Southeast Asian Airlines (SEAir) offered a different view, saying the local air travel market was big enough for all airlines—foreign and local.

“We have a population of close to 100 million, but only 15 million of us travel. In Australia, they have more sheep than people but their industry and their airlines are bigger than ours,” SEAir president Avelino Zapanta said.

He said giving foreign carriers access to the Philippines, especially to undeveloped routes, would help the air travel market grow, benefiting all airlines.