Open-skies draft IRR may be revised after carriers air concerns

Business Mirror
Tuesday, 19 April 2011 20:39   Lenie Lectura / Reporter

THE Civil Aeronautics Board (CAB) is open to revising the draft implementing rules and regulations (IRR) of Executive Order (EO) 29 after airlines voiced out their concerns on reciprocity.

“We will consider all of them. We will discuss all concerns during our May 2 meeting. Afterward, we will issue the final copy of the IRR,” said CAB deputy executive director Porvenir Porciuncula after the public hearing on Tuesday.

Under the proposed IRR, the board is allowing foreign carriers to apply for new air rights or increase in frequencies that are “over and above the limitations imposed by relevant Air Service Agreements.”

Under the existing setup, carriers are granted traffic rights based on the bilateral deals agreed upon by the air panel of both countries.

However, the CAB proposed under Rule IV of paragraph 4.1 that “the Philippine air panels shall hold consultation talks with the respective state of registry of the carriers operating under EO 20 to include such frequencies and capacities in their present bilateral agreement with the Philippines as regular traffic rights. Such inclusion shall include the reciprocal grant to Philippine carriers of equivalent traffic rights by the state of registry of such carriers.”

In case of failure to reach mutual agreement to grant reciprocal rights to Philippine carriers within 12 months from the grant mentioned in paragraph 4.1, the CAB may revoke the said grant.

Section 4.2 states that, “The board reserves the right to revoke, suspend or restrict operations hereby granted in the event that the state of registry of the foreign carrier...failed to extend equal opportunity to Philippine carriers.”

Philippine Airlines (PAL) said it will “challenge” the government if it will pursue to approve the draft IRR.  “Under RA [Republic Act] 776, it should be only for three days within which the government can act on an application. Twelve months are way too long,” said a PAL lawyer, who does not want to be identified.

Cebu Pacific, meanwhile, is pushing for a mutual and equal exchange of sovereign air rights between the Philippines and other countries so local carriers can compete with foreign airlines on a level playing field.

Cebu Pacific stressed during the public hearing that the IRR does not address the need for reciprocity. “Foreign airlines are granted unlimited access to Cebu from Hong Kong but we are still limited to 2,500 seats,” said the airline, adding that without reciprocity it will not be in the position to compete with the foreign airlines which can fly freely to the Philippines.

“EO 29 [Open Skies] opened our skies to bring in more tourists and Cebu Pacific remains supportive of the government’s thrust to boost tourism to the country. If given the opportunity to compete, Cebu Pacific’s trademark low fares will stoke competition and keep the foreign carriers on their toes, which is the best way to bring in the tourists. It will also benefit our own OFWs who work and live abroad. Please allow us to participate in this competition because EO 29 excludes Philippine carriers. We are ready and fit to compete with the best and the biggest foreign carriers under the same rules,” it said.