Estrada set to issue EO liberalizing charter, cargo flights

President Estrada is set to issue an executive order liberalizing charter and cargo flights.

The policy decision is seen as a major victory for the Lucio Tan-owned national flag carrier, Philippine Airlines (PAL), which has been lobbying for continued government support and protection while under rehabilitation.

In a draft executive order prepared by the Civil Aeronautics Board (CAB) President Estrada is directing the Department of Transportation and Communications (DOTC) and the CAB to accelerate the liberalization of the country’s civil aviation industry, beginning with charter and cargo flights.

Entitled "Accelerating Air Services Liberalization," the order has been submitted to the Economic Mobilization Group (EMG) for comment before being presented to Malacañang for promulgation.

Under the order, all inbound international charter passenger flight applications would no longer be subject to reciprocity requirements. This will allow foreign carriers to direct charter flights to the Philippines even if the country has no reciprocity agreement with the Philippine government.

The order said there will be no limits to capacity or frequency of charter flights to points outside Manila.

Cargo flights, on the other hand, will also be completely liberalized and foreign all-cargo carriers are now allowed to operate through Clark, Subic, Laoag, Cebu, General Santos and Davao.

The executive order, left out scheduled commercial flights although its directed CAB to initiate and conduct talks with other countries to discuss air agreements, as mandated under Republic Act 776.

The order was criticized by the Freedom to Fly Coalition which called the CAB draft as a "mockery" of a previous executive order which directed the full liberalization of the country’s civil aviation industry.

In a letter to Finance Secretary Jose T. Pardo, FFC vice president Mila Abad said the proposed EO would reverse Executive Order 219 and set the industry back by 46 years.

"EO 219 was issued precisely to bring up to date the civil aviation policy since RA 775 was passed 46 years ago when the order of the day was restriction," Abad said.

Abad said the new order’s only measure of liberalization for passenger air access is for charter flights. "Perhaps CAB is not aware that charter flights are at most a temporary arrangement and presents a minor source of air access," she said.

Abad admitted that there are constraints to runway capacity and there would be adverse effects should PAL end up closing down due to intense competition. But she pointed out that the Philippines could accommodate 6.8 million seats inbound and was currently only utilizing 4.8 million seats.