Debate rages on RP’s open skies regime

By Maricel E. Estavillo
Published on the July 6, 2007 issue of BusinessWorld

In the light of the controversies resulting from recent policy changes for Clark and Subic airports, the country is once again divided over what form of “open sky” or air liberalization policy it should adopt.

While most local airlines oppose draft Executive Order 500-B, citing the lack of reciprocity providing equal entitlement of air rights, some groups are still pressing for its immediate implementation.

“We are all for it. If EO 500-B is passed, we foresee development in Central Luzon and this will also address the congestion of the Manila airport. [And] obviously with open sky, more tourists will come to the Philippines and more Filipinos can travel abroad as fares become more affordable,” Philippine Travel Agencies Association President Jose C. Clemente III said in an interview yesterday.

E0 500-B would allow foreign airlines to exercise fifth freedom rights at Clark and Subic airports, or the right to carry passengers from a carrier’s own country to a second country, and from that country to a third country.

“The average tourist spends an average $1,200 while he is in the Philippines. We estimated that we could have easily made 3.5 million tourists last year, but we only reached 2.9 million tourists because of some air policy restrictions,” Mr. Clemente said.

His industry group is one of the industry stakeholders attending yesterday’s Philippine Chamber of Commerce and Industry-sponsored forum on open sky.

For former senator and Fair Trade Alliance lead convenor Wigberto Tañada, the recent controversies hounding aviation policy for Subic and Clark airports signals the need for the government to revisit its position. “Let’s discuss it, argue over it, study it. Then let’s see what really should be done. But it will all go back in the end to what is really the overall policy of the country,” Mr. Tañada said. “There should be a meeting of all stakeholders — from all government agencies concerned to private stakeholders — so that we will have coordination, coherence.”

Touchy subject

In his presentation yesterday, Civil Aeronautics Board (CAB) Executive Director Carmelo Arcilla described the progressive air liberalization policy adopted by the government as “proceeding at a healthy pace.”

He admitted, though, that there have been cases where the foreign partners of Philippine air carriers got the upper hand during the implementation of air service deals.

The latest is the case of Asian Spirit, which until now is waiting for the approval of the South Korean government for its application to fly regular scheduled flights from Kalibo in Aklan to Incheon in South Korea.

“We filed it last December, we should have been flying already,” Asian Spirit Chairman Antonio Turalba said in a phone interview.

Recently, the Macau government rejected Asian Spirit’s application to fly to Macau, while Hong Kong has just rejected the application of Cebu Pacific to field charter flights despite the presence of Hong Kong Airlines at Clark airport.

“Reciprocity has become a touchy subject,” Mr. Arcilla said, adding the open sky policies of some countries are selective and restrictive.

“We should assess the value of granting the air rights on a case-to-case basis, because countries are dissimilar. There seems to be no size fits all formula in air liberalization, owing to dissimilar, political, economic and geographic differences,” he said.

Generally, Mr. Arcilla said, smaller countries with strong economies like Bahrain, Singapore and Dubai are aggressive in pursuing air liberalization deals with foreign country partners. “They have no market to open, and they will benefit more from increased access,” he said.

The ‘open skies’ issue in Clark: A question in fairness

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