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‘Pocket open skies’ okayed

Posted on March 19, 2011

FURTHER OPENING UP of Philippine airspace has been ordered by President Benigno S. C. Aquino III, who said the move would spur competition, promote investments and trade, and provide travelers more choices.

Sec. Ricky A. Carandang of the Presidential Communications Development and Strategic Planning Office told Palace reporters that the intent of the so-called "pocket open skies" policy was to "liberalize the entry into secondary airports."

Two executive orders (EOs) dated March 14, 2011 have been issued by Malacañang: EO 29 authorizing the Civil Aeronautics Board (CAB) and negotiators to "pursue more aggressively the international civil aviation liberalization policy" and EO 28 which again splits the country’s negotiating panel into two.

Philippine carriers lost their membership in the negotiating panels, with Mr. Aquino relegating their status to "observers."

Airline representatives contacted yesterday reserved comments on the adoption of the open skies policy. Some questions were raised, however, over flag carriers losing the right to have their say in aviation talks and whether liberalization would have its intended effect.

EO 29 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 (NAIA). Waivers to frequencies/capacities under existing air services agreements (ASAs) 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.

The three freedoms, Section 2 of EO 29 states, will be offered "without restriction as to frequency, capacity and type of aircraft and other arrangements that will serve the national interest" as may be determined by the CAB.

Section 3, meanwhile, states that the CAB can "grant any foreign air carriers increases in frequencies and/or capacities in the country’s airports other than the NAIA..." These will be subject to approval by the president and will operate as a waiver of existing ASA restrictions.

CAB director Carmelo Arcilla said the country had 10 secondary airports, all of which stand to benefit in terms of tourism.

"This policy will benefit our developmental routes ... the tourist destinations are outside Manila, so with direct flights to these areas, it will be more convenient for prospective tourists to fly there," he said in an interview.

EO 29 is an expansion of EOs 500 and 500-A, issued in 2006 during the Arroyo administration, which provided unlimited third and fourth freedom rights to foreign carriers operating in the Diosdado Macapagal International Airport in Clark and the Subic Bay International Airport in Subic.

Philippine carriers have objected to pocket open skies -- their outcry led to the issuance of EO 500-A which took back fifth freedom rights granted under EO 500 -- but Tourism Secretary Alberto A. Lim said the latest orders were a "good compromise" given NAIA’s congestion. Mr. Carandang insisted that "domestic aviation will still be primarily in the hands of local carriers."

Representatives of domestic carriers said they were reserving comment on the new policy.

"We haven’t seen a copy of the EO yet ... we will have to study it," Cebu Pacific corporate communications manager RG Orense said.

Joey de Guzman, vice-president for corporate communications at Philippine Airlines (PAL) also said that the directive needed further examination.

He pointed out, however, that EOs may not achieve their purpose of boosting air travel as foreign carriers had yet to maximize the use of available frequencies.

"Why are they not coming droves? It’s a function of the market ... It’s not just the ability to fly there," Mr. de Guzman said.

EO 28, meanwhile, recreated the Philippine Air Negotiating Panel and the Philippine Air Consultation Panel, dropping a 2001 reorganization under EO 32 -- also issued by the Arroyo government -- that had merged the two into a single entity.

The Foreign Affairs secretary was named chief of the negotiating panel, with the chiefs, or their duly authorized representatives, of the Trade, Transportation, Labor and Tourism departments, and the CAB as members.

The country’s official air carriers, named members of the two panels in EO 219 issued in 1995 during the Ramos administration, can now merely "participate in the proceedings as observers."

PAL’s Mr. de Guzman said he was concerned over the carriers being relegated to the background but Tourism’s Mr. Lim said the new composition was consistent with international standards.

Initial talks leading to the conclusion of ASAs will be handled by the negotiating panel. Succeeding talks regarding these ASAs will be handled by the consultation panel, which will be headed by the Transportation secretary or his representative. The CAB executive will sit as co-chairman, with the secretaries of the Trade, Tourism, Foreign Affairs and Labor departments as members.

EO 28 does allow the chairman of the consultation panel to name new members with the approval of the president.

No such provision applies for the negotiating panel.

The CAB -- which can form as many air panels as needed -- will act as a secretariat and will be responsible for preparing negotiation and consultation talks.

Both Palace orders take effect next month after having been published yesterday. The CAB was directed to draft implementing guidelines of EO 29 within 30 days from the directive’s effectivity.