Open skies: Selling out to foreign airlines?

The big news we just got is that finally after so many years of endless debates by the pros and the cons in the aviation industry, Pres. Benigno “P-Noy” Aquino III signed what is known as its “Pocket Open Skies” policy when he signed two Executive Orders, first EO No. 29 authorizing the Civil Aeronautics Board (CAB) “To pursue a more aggressive International Civil Aviation Liberalization Policy” which allows “Unlimited third and fourth freedom rights to foreign air carriers operating at the Diosdado Macapagal International Airport (DMIA) and Subic Bay International Airport (SBIA).”

The other Executive Order was EO No. 28 which in effect breaks in two the CAB negotiating panel, where the two flag carriers in this country lost its chairs in the negotiating panel and were relegated to “observer” status. Now we ask, whatever happened to protecting the interest of Filipino businessmen? This EO sounds like someone in the Aquino administration is now lawyering for foreign carriers?

I confess that I was once an advocate for Open Skies policy during the time when Tita Cory was President, when the Philippines was the darling of the world, having rid of the Marcos dictatorship through a peaceful revolt called the EDSA revolt. Back then, investments were pouring into the Philippines and Cebu was experiencing our tourism boom, which in those days was stymied by the number of seats that Philippine Airlines (PAL) had. Hence we believed that our tourism industry was limited to what PAL could offer and embracing an Open Skies policy would have allowed foreign airlines to fly tourists to the Philippines and increase our tourism growth.

Alas, we went into a decade-long debate on the issue whether or not we should adopt an Open Skies policy. It’s been 25 years since and now under the administration of Tita Cory’s son, P-Noy, he has finally signed a compromise policy called “Pocket Open Skies”. But if you ask me… it just took this country too long to take advantage of an Open Skies policy when the opportunity was presented to us right before our eyes.

Today world aviation has changed dramatically, where major air carriers were forced to merge into alliances in order to save on costs and in fact the bigger challenge they face comes from those budget airlines. Here in the Philippines, our national flag carrier Philippine Airlines (PAL) now has a strong competitor in Cebu Pacific (CEB) which is considered a budget airline and did not exist 25 years ago, which boasts to have overtaken PAL as the largest carrier in this country.

PAL itself is barely surviving thanks to a labor union that continues to rock the plane (not the boat) in these very precarious of times with strike notices, especially when the world economy has not yet recovered from the global financial crisis of 2009. The latest from PAL is that, it needs a loan of $150 million to finance its capital expenditures. Now don’t you think that a Filipino owned airline must have some kind of support from our government?

Meanwhile, Cebu Pacific has asked the Aquino government to “modify” this Pocket Open Skies policy simply because a place like Hong Kong limits Philippine carriers to only 2,500 seat flights per week. Hence Open Skies would allow them unlimited flights to the Philippines while limiting our local airlines to a few seats per week. This is why Cebu Pacific would like to see some kind of reciprocity with other airlines, lest they take the opportunity to use this Pocket Open Skies policy to kill their Filipino competitors!

With the Middle East literally burning from the unrest of pro-democracy protests, with Japan in shambles, thanks to the earthquake and that devastating tsunami that damaged the reactors of the Fukushima nuclear plant, I doubt if world economy would recover in the year 2011.

So let’s ask ourselves… is it the right time to adopt a Pocket Open Skies policy? I don’t think so! How can foreign airlines fly to the Philippines even if they want to when we are still under Category 2 status by the US Federal Aviation Administration (FAA)? Even more intriguing is the fact that the CAB already allowed foreign carriers to fly to the Philippines through Mactan or Davao in a reciprocity arrangement, yet they hardly used their entitlements? So where are we going wrong?

Call it coincidence that our Tourism Secretary Alberto “Bertie” Lim was once the vice-chairman for the so-called “Freedom to Fly Coalition” which is truth was a lobby group by foreign countries. On May 22, 2000 barely two months when my talkshow “Straight from the Sky” started I even had a very healthy discussion on this very issue. If our Tourism Secretary truly wants foreign airlines to come to our country, then he should start with those airlines that were given entitlements by the CAB like Gulf Air that once flew to Cebu, but stopped. I reckon that it wasn’t commercially viable endeavor. So we don’t really need a Pocket Open Skies anymore.

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