Gov’t urged to revoke foreign carriers’ air rights if open skies not reciprocated

Posted on May 08, 2011 10:25:05 PM
Business World

BUDGET CARRIER Cebu Pacific urged the government to revoke air rights of foreign carriers whose home countries fail to grant similar privileges to airlines based here even as the implementing rules of the “pocket open skies” policy do not bind state agencies to do so.
“Despite the lack of reciprocity in the implementing rules, [we] remain hopeful that the CAB (Civil Aeronautics Board) 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,” Cebu Pacific said in a statement yesterday.

The CAB finalized last Friday the implementing rules of Executive Orders (EO) 28 and 29. A provision there states that CAB has the right to revoke, suspend or restrict any operations granted should no reciprocal air rights be granted to local carriers.

CAB Executive Director Carmelo L. Arcilla similarly told reporters last Friday that the Palace order also allows the CAB to withdraw air rights “if shown to cause actual and unfair competitive disadvantage to Philippine carriers.”

However, national interest -- tourism and its effects on the economy -- is stated in the rules to be the prevailing principle to be considered when such decisions on revoking air rights are mulled.

With EO 29’s implementing rules now finalized, the “pocket open skies” policy can take effect later this month if its publication in a newspaper is expedited.

EO 29, dated March 14, allows negotiators to offer foreign airlines third, fourth and fifth freedom rights, plus frequencies and capacities, to Philippine airports other than the Ninoy Aquino International Airport.

Waivers to frequencies/capacities under existing air services agreements will also be allowed.

The freedoms -- part of a set of commercial aviation rights also known as the nine “freedoms of the air” -- involve, in numerical order, the right to fly from one’s own country to another; fly from one country to one’s own; and fly between two foreign countries while the flight originates or ends in one’s own.

In no case should cabotage rights -- involving the transport of goods and passengers between two or more points within the Philippines (covered by the eighth and ninth freedoms) -- be granted to any foreign carrier, EO 29 states.

Cebu Pacific went on to say that it was “disappointed” with how the implementing rules turned out.

“Cebu Pacific is naturally disappointed with the approved [rules], especially since we have expressed our concerns on reciprocity right from the start,” it said.

“Cebu Pacific can compete with foreign carriers if given a level playing field of equal and reciprocal traffic rights ... We would, however, like to assure the government of our continued cooperation, and full support of their objectives to boost tourism,” it said.

Open skies regulations out early next month

Business World
April 19, 2011 11:49:19 PM

FOREIGN CARRIERS can begin applying for new entitlements next month with the government scheduling an early May release of rules implementing a "pocket open skies" policy.

A public hearing was held yesterday on proposed guidelines, which Civil Aeronautics Board (CAB) deputy director Porvenir P. Porciuncula said "should be finished by May 2 ... after which we can start receiving applications from foreign [carriers]."

Malacañang last month issued Executive Orders (EOs) 28 and 29, which respectively reorganized the country’s negotiating panels and ordered continued liberalization of the air industry.

The CAB was ordered to draft the implementing rules and regulations (IRR) of the new policy -- targeted at increasing traffic to secondary airports -- and Mr. Porciuncula said the agency would be reviewing position papers due on Monday from airlines, government agencies and other stakeholders.

The CAB yesterday reiterated the government’s position of working towards overall benefits for the country as it noted domestic carriers’ concerns that they would not be getting the same access to foreign airlines’ home countries.

"It’s not reciprocity but the totality of mutual benefits that should be looked into," Mr. Porciuncula said.

The draft IRR allows the CAB to take back entitlements if a foreign carrier’s home state does not allow reciprocal rights within 12 months.

However, it also allows the board to waive reciprocal rights if allowing foreign airlines added entry is seen as in the "national interest."

The reciprocity concern was again raised yesterday by Cebu Air, Inc. and South East Asian Airlines, Inc. (Seair).

"We’re asking that local carriers be given the opportunity to compete," Cebu Air Vice-President Alex B. Reyes said during the public hearing.

"We see that the draft IRR [would give us a] disadvantage if it would open up Philippine skies without mandating that the same benefits would be provided to local airlines," he added.

Seair President and Chief Executive Officer Avelino L. Zapanta, for his part, said the applications of foreign airlines "should be accompanied with the endorsement of their governments that they are willing to grant the same rights to any Philippine carrier." -- K. A. Martin