People’s Journal
Thursday, December 17, 1898
Seriously flawed policies of the Civil Aeronautics Board have been aggravating the financial difficulties of Philippine Airlines during the past several years, according to aviation industry analyst.
Largely through simple negligence or indecision and the indiscriminate grant of so-called temporary operating permits, CAB has been abetting the loss of markets and landing rights of PAL, the analysts said.
“CAB has been issuing resolutions and undertaking decisions as if it is the overseas branch or extension office of foreign carrier competitors of PAL,” a CAB insider observed.
As the country’s national flag carrier and partly government-owned, PAL is tainted with national interest, a factor which seems to be totally disregarded by CAB in all its deliberations, it was added.
The Government Service Insurance System, Philippine National Bank, Development Bank of the Philippines, Land Bank, and Armed Forces of the Philippines Retirement and Separation Benefit System all hold equity positions in PAL.
“We don’t need protection. We only want fair competition,” an irate PAL official who declined to be named stressed.
Citing CAB records, the analyst said faulty CAB decisions and resolutions had favored Saudi Arabian Airlines, Emirates, Gulf Air, Air Nauru, CLA Air Transport, Astro Air, Silk Air, Nippon Cargo Airlines, KLM Royal Dutch Airlines, Qatar Airways, Continental Air Micronesia and Federal Express, among others, causing revenue shipping damages to PAL.
These foreign airlines have been allowed increased frequencies of flights to Manila, bringing in and out hundreds of thousands of overseas Filipino workers without reciprocal benefits to PAL.
In the case of Saudi, for instance, CAB did not lift a finger when Saudi Arabia canceled a commercial air agreement with the Philippines in 1994 that used to guarantee for years profitable operations for PAL in the OFW-rich Saudi market.
Now all flights to and from Saudi Arabia are conducted on the basis of TOPs, which are routinely extended despite repeated protest from PAL. The same routine extensions have been granted to other foreign passenger and cargo airlines.
In the case of Emirates, a cease-and-desist order was issued by CAB under Resolution 84 issued in 1995 revoking the airline’s permit to fly a fourth frequency to Manila via Hong Kong, but Emirates continues to operate the HK flight without any action on the part of CAB.
The same goes for Silk Air which has been exceeding its maximum frequency entitlements to Cebu and Davao, both once the exclusive preserve to PAL.
CAB has been giving advantages to foreign airlines beyond what is expected of it, analysts said. For KLM, for instance, CAB advanced its fourth frequency to and from Manila in October 1997 via a TOP when the original agreement calls for such flight to start only by April 1998 yet.
The same anti-PAL policy favored Air Micronesia and Federal Express which were both granted hubbling rights in Manila and Subic, respectively, long before the effectivity of the agreements covering such operations between the Philippines and United States.
“Indeed we have here an agency (CAB) which is trying to preserve an ICU atmosphere of operations for a national flag carrier in the hope probably of presiding over its burial in the near future,” a CAB source said.
But the government is reviewing decisions made by civil aviation authorities in the past that were detrimental to the national interest in preparation for a total overhaul of national aviation policy, according to Finance Secretary Edgardo Espiritu.
“This is what we are reviewing to rectify some of these errors made before,” Espiritu said shortly before President Estrada left for Vietnam the other day to attend the ASEAN leader’s summit.
Espiritu did not elaborate on the move as he reiterated the President’s resolve to maintain a viable local air transport industry which is crucial to the health of the national economy.
But in an interview, a senior CAB official admitted these policy errors which included the “indiscriminate” granting of TOPs, passenger capacity entitlements and so-called “fifth freedom” rights to foreign carriers.
These concessions have severely hurt the local aviation industry, said Foreign Affairs Assistant Secretary Franklin Ebdalin, a member of the CAB.
“The previous CAB administration gave away our air traffic rights to foreign carriers without regard for our own interest,” Ebdalin added, deploring the agency’s failure to protect the national interest in carrying out the liberalization policies of the Ramos’ administration.
“That was wrong. Philippine air rights are national assets. We should not be giving them away for nothing in return. Why should we side on foreign interest in the name of liberalization?” he posed.
“It is the government’s sworn duty to protect its own nationals. Even the US, whose carriers are already the most powerful in the world, still aggressively protects its own.” Since the country liberalized its aviation industry in 1993, it has seen a tremendous increase in passenger seat capacity that has proved ruinous to local carriers, many of whom are start-ups or newly privatized firms with no access to government support.
Even more alarming, from zero in 1993, the previous CAB had allowed foreign carriers to gain over 500,000 seats per year in “fifth freedom” rights or the right to pick up passengers in intermediate points (not in the carrier’s home country) and fly them to Manila.
This has siphoned off traffic – mostly Filipino overseas workers, businessmen, and tourists – that would have otherwise gone to Philippine carriers.
To rectify this glaring oversights, Ebdalin said the CAB would, for starters, begin reviewing the Philippines bilateral air service agreements with a number of countries.
“We need to review the imbalances that exist and then we’ll propose adjustments to the agreements accordingly.” Rose Garcia/PNA
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