PAL blocks renewal of business permit of RP-Japan air cargo handling venture

Manila Bulletin
Wednesday, September 2, 1998
Ronnie C. de Guzman

NINOY AQUINO INTERNATIONAL AIRPORT — The Central Logistics Asia (CLA), a Filipino-Japanese air cargo joint venture, has appealed to the Estrada administration to extend its temporary operating permit (TOP) to do international cargo handling business in the country.

The CLA made this move as its permit will expire on Sept. 9 and its extension is reportedly being blocked by the Philippine Airlines (PAL) questioning the legality of the CLA's existing TOP issued during the Ramos administration.

Soen Chiyokawa, CLA Japanese representative, said the "inconsistencies of past and present policies towards attracting foreign in are sending wrong signals to the business community in Japan."

Chiyokawa said that it is imperative for the Estrada administration to show its commitment in pursuing the liberalization policies of the Ramos administration to assure investors, particularly interested Japanese businessmen who are waiting in the wings to pour in their billions of yen into the country.

CLA officials said that since a TOP was granted last March for a period of six months, the CAB has carefully considered all issues including the viability of CLA as a cargo airline posing no problem at all for extension.

They said that carriers require at least two extensions of their TOP before actual operations commence or when a permanent permit is granted.

They said that withholding the extension of the TOP would deprive CLA of a chance to prove its fitness.

The officials said that the mere fact that former President Ramos granted the CLA a flag-carrier status on the recommendation of the CAB showed the government's full confidence in the fitness of the CLA to represent the Philippines before other countries.

Depriving CLA the chance for an extension is tantamount to depriving a Philippine-based air cargo firm to compete with foreign based carriers such as Fed-Ex, UPS, Northwest Cargo, United Cargo, and Polar Air, all of which are allowed by the country to operate to and from the Philippines.

Withholding the extension of the TOP is tantamount to revoking a designation made by the office of the President, he said.

Moreover, CLA officials clarify that PAL did not need the landing slots that CLA got from Narita, Japan because it does not have the authority to use additional slots over what it has already been granted.

"PAL is asking for the new slots at Narita supposedly for the use of additional flights from Narita-Cebu, when in fact it has not even lived up to its commitment to resume the Cebu-Narita flights it suspended last June," they said.

CLA officials point out that by not allowing CLA a TOP extension, the Philippine government will be giving up a lucrative market in exports in favor of foreign carriers and not to PAL.

They said that while PAL has every right to oppose the TOP extension for CLA, it is in the essence of competition and liberalization to allow CLA to operate alongside PAL and compete against foreign carriers in the Philippine-Japan route.@