'Migratory Planes' Giving PAL Unfair Competition

The Journal

Monday, December 28, 1998

Hector Lawas

One of the causes of Philippine Airline's financial losses was the alleged greediness of the so-called "migratory planes”.

These migratory planes are actually foreign airliners that briefly stop in Manila to pick up passengers, consequently “stealing" the potential revenues of PAL, the country's flag carrier.

Consider this analogy.

An Asian airline — or any other airline outside the Philippines — was allowed by the local air transport to briefly stop in Manila.

This is not unusual because there are hundreds of foreign commercial aircraft making stopovers daily at the airport.

But the problem is they are allowed to “pick up more passengers” while on a stopover en route to their final destination.

Worse, these "migrating birds” would charge passengers less airfare, compared to the normal airfare PAL would be charging for a direct flight.

As a crippling consequence, this present setup of unfair competition, which incidentally was approved during the Ramos government, would definitely “kill” PAL because passengers already battered by the financial crisis would definitely choose the cheaper fare.

"If an airline was allowed to stop in Manila and was further allowed to pick up passengers, they will be charging less compared lo the fares PAL will be charging for direct flights,” a source said.

For example, the air rate of PAL for the Manila-Saudi direct flight is $500, the other plane would charge only $350-$450.”

To correct this injustice and to level the “flying field” between the local and the foreign carriers, the Civil Aeronautics Board (CAB) is currently reviewing the country’s air service covenants with international airlines.

This stemmed after the present set of CAB officials has finally uncovered this serious irregularity involving foreign airlines and air transport officials during the Ramos administration.

The new officials of CAB, according to sources, are dead serious in rectifying what they deemed a grave mistake during their stay in government.

“They (the new CAB officials) are not against open skies. All they want is to balance the playing field by limiting the approval of foreign airlines’ applications to increase flights to and from the country,” the source continued.

The former CAB officials have indiscriminately allowed international carriers more flights using Manila as a stopover.

The present set of CAB officials, however, has already denied the applications of two foreign airlines to increase their frequencies to Manila, the Korean and Singapore Airlines.

“They (foreign airlines) are like birds who escaped the harsh weather condition of their country only to feast on the vegetation of another country,” the source said.