Philippines-United Arab Emirates ink new air pact

MANILA, Philippines - The Philippines and the United Arab Emirates (UAE) have entered into a new air services agreement, increasing flight entitlements by 25 percent amid strong opposition from national flag carrier Philippines Airlines Inc. (PAL) and budget airline Cebu Air Inc. (Cebu Pacific).

“The Philippines and the UAE signed a new memorandum of understanding) on air services that enhanced the exchange of traffic rights between the two countries,” Civil Aeronautics Board executive director Carmelo Arcilla said in a text message.

Under the new agreement, both countries agreed to increase the maximum number of flights per week for each country to 35 flights from the current 28 provided that UAE carriers can also operate separately to Clark and Cebu within one year from signing of the MOU.

“This condition is in line with our open skies policy in our developmental gateways outside Manila, and forces UAE airlines to invest in our developmental gateways,” Arcilla said.

The last air talks between the Philippines and UAE were held in September 2012, where the two countries agreed to double the flight entitlements to 28 per week from 14.

Currently, Emirates and Etihad Airways have 14 flight entitlements per week. PAL has 14 flight entitlements per week, while PAL Express and Cebu Pacific have seven each.

Furthermore, the Philippines also got on a unilateral basis additional fifth freedom traffic rights, which means that Philippine carriers can fly from Manila to UAE and onward to any country including the United Kingdom, United States and Saudi Arabia.

“This will improve Philippine connectivity and also the commercial viability of our routes to the UAE,” Arcilla added.

Moreover, both parties agreed on coterminalization, where one country can fly and hop to different cities in another country without picking up passengers in the domestic leg.

“The Philippine government panel and our airlines view the exchange as more or less fair, as the increase in traffic rights for both sides, which our airlines opposed, is minimal,” he said.

Prior to the air talks, PAL and Cebu Pacific have expressed their opposition to the additional flight entitlements, saying additional capacity to Middle East airlines that get government subsidies would further hurt the local carriers.

PAL has been vocal that UAE wants special advantage and asks for more rights that are not jsutified by the market, adding that it has been aggressively pressing the government to grant such rights.