CEB not happy with EO 29 implementing rules

Philippine Star
By Mary Ann LL. Reyes   (The Philippine Star) Updated May 09, 2011 12:00 AM

MANILA, Philippines - Gokongwei-controlled Cebu Pacific (CEB) has expressed its “disappointment” over the rules and regulations issued by the Civil Aeronautics Board (CAB) to implement Executive Order 29 on the so-called open skies policy, after government failed to heed calls from local carriers for the IRR to ensure fair competition.

CEB said the CAB ignored proposals from various quarters to amend the proposed IRR to ensure fairness.

President Aquino last March issued twin executive orders that will implement open skies in the Philippines , eventually allowing foreign airlines to serve selected local routes. EO 28 creates the Philippine Air Negotiating Panel (PANP) and the Philippine Air Consultation Panel (PACP), while EO 29 authorizes the Civil Aeronautics Board (CAB) and the two panels to explore discussions with foreign carriers regarding the aviation liberalization policy commonly known as “open skies.”

“We are naturally disappointed with the approved EO 29 IRR, especially since we have expressed our concerns on reciprocity rights from the start. Regrettably, none of CEB’s proposed amendments that would have produced fair competition and enshrined reciprocity into the IRR were adopted by the CAB,” company officials said.

CEB maintained 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.

It stressed that it can compete with foreign carriers if given a level playing field of equal and reciprocal traffic rights. “This level playing field is vital for the continued viable existence of an airline which has invested billions of dollars in the Philippines , and employs thousands of Filipino workers and professionals,” it said.

Officials said that with reciprocal open skies, CEB, as a homegrown Philippine flag carrier, will have the opportunity to offer its Filipino brand of service and trademark low fares to the Asia-Pacific region and the overseas Filipino workers (OFWs) employed in those countries. “Sadly, the current IRR of EO 29 will deny that option,” CEB emphasized.

The company however assured government of its continued cooperation, and full support of their objectives to boost tourism in the Philippines.

“Since the airline’s inception, CEB has been significantly contributing to the country’s tourism development. This is evident in CEB’s yearly passenger growth. Despite the lack of reciprocity in the IRR, CEB remains hopeful that the CAB will hold faithful to its promise that they will revoke the air rights of foreign carriers with home countries that fail to give similar unlimited access to Philippine carriers to their skies,” it added.

CEB has been 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.

Philippine Airlines (PAL) for its part criticized the non-inclusion of representatives from local carriers in the Philippine Air Panel that will negotiate air service agreements. The carriers shall as observers, prior to any negotiation submit their position/requirements relative to the bilateral partner.

PAL president Jaime Bautista in an interview with The STAR questioned Rule 2.7 which “reserves to the Air Panel the right to amend, alter, or revise any position taken, prior to the bilateral talks, if it deems to be more in keeping with national interest.”

Bautista stressed that he does not see the point of all these considering that there are many available entitlements but not takers.

Meanwhile, CEB president Lance Gokongwei told The STAR that the provisions of Rule IV under the IRR (transformation of operating rights into traffic rights) tend to contradict each other.