Cebu Pacific disappointed with pocket open-sky rules

Business Mirror
Monday, 09 May 2011 10:19   Lenie Lectura / Reporter

LISTED airline Cebu Air Inc. expressed disappointment with the rules on open-sky policy that the government had issued on Friday, saying local airlines were left out.

Rival Philippine Airlines said it has yet to review the IRR.

In a statement, Cebu Air said none of its proposed amendments were included in the implementing rules and regulations.

“Cebu Pacific [CEB] is naturally disappointed with the approved EO [Executive Order] 29 IRR [implementing rules and regulations], especially since we have expressed our concerns on reciprocity right 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 [Civil Aeronautics Board],” the airline said.

CEB pointed out that there should be reciprocity as it pushes 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.

“CEB can compete with foreign carriers if given a level playing field of equal and reciprocal traffic rights,” it said.

It pointed out that a 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.

“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 employed in those countries. Sadly, the current IRR of EO 29 will deny that option,” it added.

Third, fourth and fifth freedom rights were allowed under the approved IRR. These rights allow foreign airlines to mount flights to and from any airports in the country, except the already congested Ninoy Aquino International Airport (Naia), without restrictions on frequency, capacity and type of aircraft.

The CAB, which approved the rules, said it will make sure that local airlines will get fair treatment by taking back the air rights if there will be no reciprocity.

“Any grant of rights under EO 29, not being the result of a bilateral action, is essentially provisional and can be withdrawn if shown to cause actual and unfair competitive disadvantage to Philippine carriers,” the IRR said.

The CAB stressed that the order is meant to attract foreign airlines to operate to the country’s secondary gateways, which are largely underserved or totally unserved by airlines, foreign and local.

CEB stressed that despite the lack of reciprocity in the IRR, it remains hopeful that the CAB will be faithful to its promise that they will revoke the air rights of foreign carriers if they fail to give similar unlimited access to Philippine carriers to their skies.

“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,” it said.