Corporate News

Carriers fight over Malaysian allocation

Posted on September 16, 2011

TWO CARRIERS -- Zest Airways, Inc. and Air Philipines Corp. -- have asked regulators to revoke seat entitlements to Malaysia that were allocated to budget carrier Cebu Pacific which they had wanted for themselves, a notice published yesterday showed.

“[The two airlines requested] for the revocation of Cebu Pacific’s allocation of entitlements to Malaysia dated July 15, 2011,” the Civil Aeronautics Board (CAB) bulletin read.

Cebu Pacific, operated by Cebu Air, Inc., had been granted 720 seats weekly on the Manila-to-Kuala Lumpur route out of the 2,520 seats which the Philippines bagged in June air talks with the Southeast Asian neighbor. Unlimited traffic rights to Malaysia carriers were granted in return under the Aquino administration’s “pocket-open skies” policy.

“We have granted Cebu Pacific temporary allocations to Malaysia because they applied for it early… However this is only temporary.

There is still no final decision on the allocations for the new entitlements,” CAB Executive Director Carmelo L. Arcilla said in a telephone interview yesterday.

According to the bulletin, a hearing on the matter has been slated on Sept. 20 for ZestAir’s and Air Philippines’ petitions.

The challenge to the allocations comes as CAB is refusing to undertake another round of air talks to increase the entitlements which four carriers -- South East Asian Airlines (Seair) included -- want amid plans of Malaysian rival Air Asia Bhd. to increase its presence here.

“Four airlines are vying for the new rights… Understandably all of them tend to be competitive and would want to have traffic rights,” Mr. Arcilla said.

“The airlines have yet to submit their position papers and we have yet to make an evaluation. Hopefully by this month, we will come up with a decision,” Mr. Arcilla said.

Currently, only two local carriers fly to Malaysia: Cebu Air and flag carrier Philippine Airlines.

Prior to the air talks, the two airlines both utilize a total of 2,300 seats per week on the Manila-to-Kuala Lumpur route.

“We’ll just have to allocate what we have,” Mr. Arcilla said.

Zest Air has applied for 900 seats per week on the Manila-to-Kuala Lumpur route to be utilized this year. It is then seeking for the number to be increased to 1,260 seats weekly for next year.

Air Philippines previously filed a petition before the CAB to be granted 1,260 seats per week on the Manila-to-Kuala Lumpur route.

Seair, on the other hand, asked the government for 2,520 seats per week on the Clark-Kuala Lumpur route. In addition, the budget carrier has asked for a number of seats for other Malaysia destinations. -- Kathleen A. Martin