Business Mirror
Tuesday, 05 April 2011 23:44
Recto Mercene / Reporter
Low-cost carrier Cebu Pacific fully agrees with the administration’s “open skies” policy, made official under President Aquino’s Executive Order (EO) 29, but suggests that it should be accompanied by reciprocity if the Philippine carriers were to engage in an equal playing field with foreign carriers.
“We have always been supportive of aviation liberalization, including open-skies agreements with other countries, and we have never been shy telling media about our support for a liberalized aviation industry,” says Cebu Pacific (CEB) president Lance Gokongwei at a Kapihan media forum in Pasig City.
However, he added that about three weeks ago, the airline broke corporate tradition and went public with its concern over the lack of reciprocity under EO 29.
“It was a first in CEB’s 15-year history. My appearance before you today or any Kapihan for that matter is also a first,” he said, adding that they have decided to go in the open and “engage the issue constructively so there would be a better understanding of why reciprocity based on equal opportunity is extremely important not just to Cebu Pacific but also to the public in general.”
The CEB headman said EO 29’s objective is to bring in more tourists, since the policy allows foreign carriers to compete and freely fly to the Philippines.
However, he said there are two key aspects in EO 29 that has to be clarified—increased competition and unlimited access by foreign carriers.
Although CEB said they do not question these assumptions, they would like to add another dimension—reciprocity.
“We would like to be part of this competition. If foreign carriers are given unlimited access on routes to and from the Philippines, we believe it is only fair, that CEB and other local airlines be given unlimited access to and from the Philippines to these carriers’ home countries, on an equal opportunity of access on a level playing field.”
He said reciprocity will keep all airlines on their toes and allow Filipino carriers like CEB to compete with foreign carriers.
“Ultimately, more competition leads to lower fares, benefiting not only CEB but the whole tourism industry, here and abroad.”
Acccording to Gokongwei, CEB is very proud to say that their low fares played a major role in spurring growth in tourism as shown by the 127-percent growth in domestic tourism in the last five years—from 7.3 million in 2006 to 16.6 million passengers in 2010.
He added that international tourism from the markets they serve has grown much faster than from the markets the carrier does not fly to. “Last year alone we grew our international traffic to 39 percent. That’s 2.2 million passengers in 2010 alone.”
To prove his claims, he said in 2005, a year before CEB started flying to Singapore, tourist arrivals were estimated at 69,435. Since CEB introduced lower fares to Singapore in 2006, that rate has grown 74 percent, resulting in 121,083 tourist arrivals from Singapore last year.
“At the risk of sounding immodest, these facts show that CEB have championed tourism and will continue to do so wherever we are allowed to fly and compete,” he said.
Citing examples of the consequences of nonreciprocity, Gokongwei pointed to the agreement with Hong Kong limits carriers to only 2,500 seats per week on the Hong Kong–Cebu route for every one, but under the open skies the Philippine carriers “will still be limited to 2,500 per week but all Hong Kong carriers can now fly this route without any limit.”
“We have been asking for additional flights to Osaka, which the Philippines is entitled to under the current Philippine-Japan Air Services Agreement. However, our request, to this day, has not been approved. In the meantime, All Nippon Airways (ANA) was recently allowed to come in and operate flights from Tokyo to Manila under the very same Air Services Agreement. This is another example of the lack of reciprocity,” said Gokongwei.
Citing Korea as a notable success story, CEB suggested that it should be built on and used as a model. He said South Korea, raising the capacity limit for each country to 19,000 seats a week, almost a threefold jump from the previous limit of 6,800.
“As a result, today, we compete with Korean carriers on Incheon and Busan routes, and airlines such as Korean Air, Asiana, Air Busan and Jeju Air are adding flights into the Philippines. Korea today is the country’s No. 1 source of tourists.”
CEB also pointed out that Japan had signed open-skies agreements this year with Singapore, Malaysia and South Korea; and with the US late last year.
He said it took their respective governments an average of just more than a month to finalize these agreements. Japan is open to more such agreements with Asean and this presents an opportunity the Philippines must grab quickly.
According to CEB, there are currently efforts to have an Asean open-skies regime but the Philippines and Indonesia remain as holdouts.
“If we sign this, the region will be open to each country’s carriers on an equal footing. This is a regional effort which I think will work better than a unilateral approach.”
He also said CEB supports reciprocal open-skies agreements with regions like the Middle East and Europe, where Philippine carriers don’t fly to today, “provided of course we can, if and when we are ready.”
“Let us have open-skies for all, not open-skies for foreign airlines and closed skies for Filipino carriers.”
Wednesday, April 6, 2011
Monday, April 4, 2011
Japan Air Lines effectively emerges from bankruptcy
Manila Bulletin
April 3, 2011, 11:59am
TOKYO (Dow Jones) – Japan Airlines Corp. said it has effectively emerged from bankruptcy protection, completing a restructuring process that entailed a massive curtailing of its workforce and routes.
But the outlook for the airline remains cloudy with travel demand sharply eroded by the massive earthquake and tsunami that hit northern Japan on March 11, sparking a nuclear crisis.
JAL said it will reduce capacity on international routes by decreasing flight frequency and switching to smaller aircraft during the period between April 6-27 to address a decline in travel demand as a result of the quake.
"We cannot be optimistic. Reservations are not growing on the back of concerns and uncertainty about the nuclear power plants," JAL President Masaru Onishi said at a press conference, citing an approximate 28% drop in domestic passengers and 25% decline in international passengers following the quake.
JAL said it has procured a total of ¥254.96 billion from 11 financial institutions and made a full repayment of rehabilitation debts amounting to ¥395.15 billion.
The carrier has already accepted a ¥350 billion injection from the government-backed Enterprise Turnaround Initiative Corp. It will further raise ¥12.7 billion in capital through a third party allotment of common shares to eight companies. JAL Chairman Kazuo Inamori said he considers the new capital as sufficient and said the company has no plans for additional financing for now.
April 3, 2011, 11:59am
TOKYO (Dow Jones) – Japan Airlines Corp. said it has effectively emerged from bankruptcy protection, completing a restructuring process that entailed a massive curtailing of its workforce and routes.
But the outlook for the airline remains cloudy with travel demand sharply eroded by the massive earthquake and tsunami that hit northern Japan on March 11, sparking a nuclear crisis.
JAL said it will reduce capacity on international routes by decreasing flight frequency and switching to smaller aircraft during the period between April 6-27 to address a decline in travel demand as a result of the quake.
"We cannot be optimistic. Reservations are not growing on the back of concerns and uncertainty about the nuclear power plants," JAL President Masaru Onishi said at a press conference, citing an approximate 28% drop in domestic passengers and 25% decline in international passengers following the quake.
JAL said it has procured a total of ¥254.96 billion from 11 financial institutions and made a full repayment of rehabilitation debts amounting to ¥395.15 billion.
The carrier has already accepted a ¥350 billion injection from the government-backed Enterprise Turnaround Initiative Corp. It will further raise ¥12.7 billion in capital through a third party allotment of common shares to eight companies. JAL Chairman Kazuo Inamori said he considers the new capital as sufficient and said the company has no plans for additional financing for now.
Sunday, April 3, 2011
‘Open skies’ policy needs work – MBC
The Manila Times
By Ben Arnold O. De Vera, Reporter
April 2, 2011
BEYOND approving “pocket open skies,” the government still has a lot of work to do to lift the aviation sector, according to the Makati Business Club (MBC).
“Developing and improving our airports, attracting investments in tourism establishments, upgrading our unique products and services, and addressing the security risks identified by the US Federal Aviation Authority in order to upgrade the country back to Category 1 are the next big steps that we hope the Aquino administration will pursue,” Peter Angelo Perfecto, MBC executive director, said in a statement on Friday.
Perfecto said the MBC “commends President Benigno Aquino 3rd, and his entire economic team, for issuing Executive Order [EO] 29 that authorizes the Civil Aeronautics Board and the Philippine Air Panels to offer and promote more liberalized international aviation agreements with foreign carriers.”
“This policy development is a milestone for the Aquino administration, signifying the government’s determined commitment to attain sustainable and inclusive growth for the country,” Perfecto said, adding that “the issuance of EO 29, signed together with EO 28 which reconstitutes and reorganizes the Philippine Air Panels, is a clear indication of the government’s focus and dedication to strategic actions aimed at direct economic growth.”
The President signed EOs 28 and 29 last month.
Perfecto said the business group “fully support[s] this aggressive stance on liberalizing civil aviation.”
“Opening our major and secondary gateways to foreign carriers will boost tourism, bolster our competitiveness as an investment location, and open vast economic opportunities in every region in the Philippines. Without this, the targets of attracting six million tourists, collecting $18.5 billion in tourism receipts, and creating three million new tourism jobs by 2016 will likely just end up as—like many other ambitious goals in the past—missed targets,” Perfecto said.
“The absence of air rights reciprocity is not an indication of the absence of any form of reciprocity. The economic potential of EO 29, especially in bringing in more tourists resulting in the generation of new jobs and the stimulation of the local economy, is the reciprocal benefit of the open skies policy that is expected to impact millions of Filipinos,” the MBC official said.
Perfecto said “the success of the tourism industry lies in the realization of EO 29 together with the full implementation of the tourism infrastructure plans laid out by DOT [Department of Tourism] Secretary Alberto Lim,” who was the previous MBC executive director.
By Ben Arnold O. De Vera, Reporter
April 2, 2011
BEYOND approving “pocket open skies,” the government still has a lot of work to do to lift the aviation sector, according to the Makati Business Club (MBC).
“Developing and improving our airports, attracting investments in tourism establishments, upgrading our unique products and services, and addressing the security risks identified by the US Federal Aviation Authority in order to upgrade the country back to Category 1 are the next big steps that we hope the Aquino administration will pursue,” Peter Angelo Perfecto, MBC executive director, said in a statement on Friday.
Perfecto said the MBC “commends President Benigno Aquino 3rd, and his entire economic team, for issuing Executive Order [EO] 29 that authorizes the Civil Aeronautics Board and the Philippine Air Panels to offer and promote more liberalized international aviation agreements with foreign carriers.”
“This policy development is a milestone for the Aquino administration, signifying the government’s determined commitment to attain sustainable and inclusive growth for the country,” Perfecto said, adding that “the issuance of EO 29, signed together with EO 28 which reconstitutes and reorganizes the Philippine Air Panels, is a clear indication of the government’s focus and dedication to strategic actions aimed at direct economic growth.”
The President signed EOs 28 and 29 last month.
Perfecto said the business group “fully support[s] this aggressive stance on liberalizing civil aviation.”
“Opening our major and secondary gateways to foreign carriers will boost tourism, bolster our competitiveness as an investment location, and open vast economic opportunities in every region in the Philippines. Without this, the targets of attracting six million tourists, collecting $18.5 billion in tourism receipts, and creating three million new tourism jobs by 2016 will likely just end up as—like many other ambitious goals in the past—missed targets,” Perfecto said.
“The absence of air rights reciprocity is not an indication of the absence of any form of reciprocity. The economic potential of EO 29, especially in bringing in more tourists resulting in the generation of new jobs and the stimulation of the local economy, is the reciprocal benefit of the open skies policy that is expected to impact millions of Filipinos,” the MBC official said.
Perfecto said “the success of the tourism industry lies in the realization of EO 29 together with the full implementation of the tourism infrastructure plans laid out by DOT [Department of Tourism] Secretary Alberto Lim,” who was the previous MBC executive director.
Open skies
With Due Respect
By Artemio V. Panganiban
Philippine Daily Inquirer
First Posted 21:43:00 04/02/2011
TO BOOST tourism, investments and the economy in general, President Aquino recently issued Executive Order (EO) 29 “authorizing the Civil Aeronautics Board (CAB) and the Philippine Air Panels to pursue more aggressively the international civil aviation liberalization policy.” Popularly known as “open skies,” this policy allows foreign carriers to access our “country’s airports other than the Ninoy Aquino International Airport (NAIA).”
Tourism and civil aviation. Immediately, the country’s air carriers – notably Philippines Airlines and Cebu Pacific – declared that while they fully support the tourism industry, the opening of our skies should not impoverish Philippine aviation. It should be subject to the principle of reciprocity. Simply stated, reciprocity means that the advantages granted to foreign carriers should be matched or reciprocated by similar benefits given to local airlines by the home state of the alien carrier.
Tourism and aviation are natural partners. The colossal tourism success of our neighbors was achieved in close collaboration with their national carriers. The phenomenal growth of tourist arrivals in Singapore, Hong Kong, Malaysia and Thailand is matched only by the spectacular rise of Singapore Airlines, Cathay Pacific, Malaysian Air and Thai International as the very best airlines of the world. Statistics show invariably that national carriers always bring in the most arrivals to their home countries.
By itself, open skies has no track record of automatically bringing in tourists in any country. Several other factors must be concurrently undertaken. For example, do we have enough hotels, resorts and lodging houses of the quality and price appropriate for the type of tourists open skies will bring? Do we have the infrastructures, like airport terminals and roads, to support the arrivals? Is there peace and security in the tourist destinations we want to open up?
Reciprocity and fairness. This paper’s editorial on March 26 stressed that reciprocity, while not mentioned in EO 29, is “only fair and just” and “the country’s representatives [who will implement the EO] must be clear and unwavering on that one condition.”
In his letter to the Inquirer published on March 30, CAB Deputy Executive Director Porvenir P. Porciuncula clarified that EO 29 “clearly recognizes” the constitutional principle mandating “equality and reciprocity” in “all forms and arrangements of exchange.”
He added that Republic Act 776 bars “unjust discrimination, undue preferences or advantages or unfair or destructive competitive practices… Hence, the local air carriers are rest assured that in the implementation of EO 29, the CAB will be fair and just…”
Freedoms, frequencies, etc. Aviation agreements are normally negotiated between countries by “air panels.” After concluding their negotiations, air panels execute Air Services Agreements (ASAs). EO 29 authorizes the Philippine Air Panels to “offer and promote third, fourth, and fifth freedom rights… without restriction as to frequency, capacity and type of aircraft, and other arrangements that will serve the national interest.”
“Third freedom” refers to the right given foreign carriers to disembark passengers coming from their home state to the Philippines. Example: a US carrier brings traffic from the United States to the Philippines. “Fourth freedom” refers to the right given foreign carriers to board passengers from the Philippines to the carriers’ home state. Example: a US carrier carries passengers from the Philippines to the United States.
Most highly desired, “fifth freedom” refers to the right given foreign carriers to pick up passengers in the Philippines destined for a third state and vice-versa. Example: a US carrier bound for the Philippines picks up passengers from Japan and brings them to the Philippines; and then picks up passengers in the Philippines and disembarks them in Japan.
These third, fourth and fifth freedom rights are normally exchanged between countries on strict reciprocity. However, EO 29 allows the Philippine Air Panels “to offer and promote” these freedoms “without restriction [i.e., without reciprocity] as to frequency, capacity, and type of aircraft, and other arrangements that will serve the national interest as may be determined by the CAB.”
Example: Say an ASA with state XX grants designated carriers from both the Philippines and XX third and fourth freedom rights with one frequency a week, via narrow body aircrafts with 100 seats. Despite these limitations and without asking any reciprocal rights, the Philippines may – in the national interest – unilaterally grant XX carriers several more frequencies a week, via wide-body jumbo jets with 400 seats.
As part of the President’s program to enhance the economy, open skies aims to boost tourism and investments. Foreign airlines that bring new tourists untapped by Philippine carriers are truly welcome. However, if they merely pouch on the markets already fully served by local carriers, it would be foolhardy to welcome and reward them via EO 29.
Highfalutin’ rhetoric in praise of reciprocity there will always be. But the reality is in the implementation, given the complexities of aviation freedoms, frequencies, capacities, routes, etc. Like natural resources, civil aviation rights form part of the nation’s wealth that must be carefully and strategically used. Ultimately, the “national interest” standard will be invoked vis-à-vis the ability of a foreign carrier to increase traffic to the Philippines from untapped new markets and routes, and not from stealing the existing traffic painstakingly developed by local airlines.
By Artemio V. Panganiban
Philippine Daily Inquirer
First Posted 21:43:00 04/02/2011
TO BOOST tourism, investments and the economy in general, President Aquino recently issued Executive Order (EO) 29 “authorizing the Civil Aeronautics Board (CAB) and the Philippine Air Panels to pursue more aggressively the international civil aviation liberalization policy.” Popularly known as “open skies,” this policy allows foreign carriers to access our “country’s airports other than the Ninoy Aquino International Airport (NAIA).”
Tourism and civil aviation. Immediately, the country’s air carriers – notably Philippines Airlines and Cebu Pacific – declared that while they fully support the tourism industry, the opening of our skies should not impoverish Philippine aviation. It should be subject to the principle of reciprocity. Simply stated, reciprocity means that the advantages granted to foreign carriers should be matched or reciprocated by similar benefits given to local airlines by the home state of the alien carrier.
Tourism and aviation are natural partners. The colossal tourism success of our neighbors was achieved in close collaboration with their national carriers. The phenomenal growth of tourist arrivals in Singapore, Hong Kong, Malaysia and Thailand is matched only by the spectacular rise of Singapore Airlines, Cathay Pacific, Malaysian Air and Thai International as the very best airlines of the world. Statistics show invariably that national carriers always bring in the most arrivals to their home countries.
By itself, open skies has no track record of automatically bringing in tourists in any country. Several other factors must be concurrently undertaken. For example, do we have enough hotels, resorts and lodging houses of the quality and price appropriate for the type of tourists open skies will bring? Do we have the infrastructures, like airport terminals and roads, to support the arrivals? Is there peace and security in the tourist destinations we want to open up?
Reciprocity and fairness. This paper’s editorial on March 26 stressed that reciprocity, while not mentioned in EO 29, is “only fair and just” and “the country’s representatives [who will implement the EO] must be clear and unwavering on that one condition.”
In his letter to the Inquirer published on March 30, CAB Deputy Executive Director Porvenir P. Porciuncula clarified that EO 29 “clearly recognizes” the constitutional principle mandating “equality and reciprocity” in “all forms and arrangements of exchange.”
He added that Republic Act 776 bars “unjust discrimination, undue preferences or advantages or unfair or destructive competitive practices… Hence, the local air carriers are rest assured that in the implementation of EO 29, the CAB will be fair and just…”
Freedoms, frequencies, etc. Aviation agreements are normally negotiated between countries by “air panels.” After concluding their negotiations, air panels execute Air Services Agreements (ASAs). EO 29 authorizes the Philippine Air Panels to “offer and promote third, fourth, and fifth freedom rights… without restriction as to frequency, capacity and type of aircraft, and other arrangements that will serve the national interest.”
“Third freedom” refers to the right given foreign carriers to disembark passengers coming from their home state to the Philippines. Example: a US carrier brings traffic from the United States to the Philippines. “Fourth freedom” refers to the right given foreign carriers to board passengers from the Philippines to the carriers’ home state. Example: a US carrier carries passengers from the Philippines to the United States.
Most highly desired, “fifth freedom” refers to the right given foreign carriers to pick up passengers in the Philippines destined for a third state and vice-versa. Example: a US carrier bound for the Philippines picks up passengers from Japan and brings them to the Philippines; and then picks up passengers in the Philippines and disembarks them in Japan.
These third, fourth and fifth freedom rights are normally exchanged between countries on strict reciprocity. However, EO 29 allows the Philippine Air Panels “to offer and promote” these freedoms “without restriction [i.e., without reciprocity] as to frequency, capacity, and type of aircraft, and other arrangements that will serve the national interest as may be determined by the CAB.”
Example: Say an ASA with state XX grants designated carriers from both the Philippines and XX third and fourth freedom rights with one frequency a week, via narrow body aircrafts with 100 seats. Despite these limitations and without asking any reciprocal rights, the Philippines may – in the national interest – unilaterally grant XX carriers several more frequencies a week, via wide-body jumbo jets with 400 seats.
As part of the President’s program to enhance the economy, open skies aims to boost tourism and investments. Foreign airlines that bring new tourists untapped by Philippine carriers are truly welcome. However, if they merely pouch on the markets already fully served by local carriers, it would be foolhardy to welcome and reward them via EO 29.
Highfalutin’ rhetoric in praise of reciprocity there will always be. But the reality is in the implementation, given the complexities of aviation freedoms, frequencies, capacities, routes, etc. Like natural resources, civil aviation rights form part of the nation’s wealth that must be carefully and strategically used. Ultimately, the “national interest” standard will be invoked vis-à-vis the ability of a foreign carrier to increase traffic to the Philippines from untapped new markets and routes, and not from stealing the existing traffic painstakingly developed by local airlines.
Friday, April 1, 2011
Thai Airways cabin factor on Japan routes dips 50%
Manila Bulletin
April 1, 2011, 12:44am
BANGKOK (Dow Jones) – The cabin factor on Thai Airways International PCL fights on its Japan routes has fallen to 50% from 90% since the series of disasters which struck Japan earlier this month, President Piyasvasti Amranand said Wednesday. Piyasvasti told reporters the average cabin factor for all routes was more than 70% during the first quarter of the year. He said total daily revenue for the Thai national carrier fell by 5% since the disasters in Japan, while the airline has trimmed flights on its Japan routes to 52 per week from 59.
April 1, 2011, 12:44am
BANGKOK (Dow Jones) – The cabin factor on Thai Airways International PCL fights on its Japan routes has fallen to 50% from 90% since the series of disasters which struck Japan earlier this month, President Piyasvasti Amranand said Wednesday. Piyasvasti told reporters the average cabin factor for all routes was more than 70% during the first quarter of the year. He said total daily revenue for the Thai national carrier fell by 5% since the disasters in Japan, while the airline has trimmed flights on its Japan routes to 52 per week from 59.
Japan woes add to flying time for some int'l travelers
Manila Bulletin
April 1, 2011, 12:43am
TOKYO (Reuters) – At least three major airlines have added a stop in Seoul for flights in and out of Japan due to staffing and supply concerns brought about by the earthquake, tsunami and nuclear troubles that have hit the country.
British Airways, Air France-KLM and Lufthansa have moved crews to Seoul and are using catering services out of South Korea's Incheon Airport, adding a stop in the country for flights through Japan, a Seoul Regional Aviation Administration official said.
April 1, 2011, 12:43am
TOKYO (Reuters) – At least three major airlines have added a stop in Seoul for flights in and out of Japan due to staffing and supply concerns brought about by the earthquake, tsunami and nuclear troubles that have hit the country.
British Airways, Air France-KLM and Lufthansa have moved crews to Seoul and are using catering services out of South Korea's Incheon Airport, adding a stop in the country for flights through Japan, a Seoul Regional Aviation Administration official said.
Cathay Pacific to cut back on flights to Japan
msnbc.com
March 31, 2011
HONG KONG — Cathay Pacific Airways said it would cut its Japan flights for two weeks from April 1 due to weakening passenger demand following Japan's devastating earthquake and tsunami.
Cathay, Hong Kong's dominant carrier, expects several months of weakness with a recovery towards the summer, but there are still uncertainties that could affect air transport demand to and from Japan, it said in a statement on Tuesday.
"It is too early to say, however, how long this situation will last and how quickly business will return to normal," Tom Owen, general manager, revenue management, said in the statement.
Cathay will cut three daily flights to Tokyo and two daily flights from Tokyo from the current seven daily services to and from the city.
It will also cut one daily flight from Osaka to Hong Kong and three flights a week to and from Nagoya.
Flights to Fukuoka and Sapporo were not affected, it added.
March 31, 2011
HONG KONG — Cathay Pacific Airways said it would cut its Japan flights for two weeks from April 1 due to weakening passenger demand following Japan's devastating earthquake and tsunami.
Cathay, Hong Kong's dominant carrier, expects several months of weakness with a recovery towards the summer, but there are still uncertainties that could affect air transport demand to and from Japan, it said in a statement on Tuesday.
"It is too early to say, however, how long this situation will last and how quickly business will return to normal," Tom Owen, general manager, revenue management, said in the statement.
Cathay will cut three daily flights to Tokyo and two daily flights from Tokyo from the current seven daily services to and from the city.
It will also cut one daily flight from Osaka to Hong Kong and three flights a week to and from Nagoya.
Flights to Fukuoka and Sapporo were not affected, it added.
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