Government urged to reject open skies on cargo

A non-governmental organization (NGO) has cautioned the government against adopting open skies on cargo since this would not be in the best interest of the country and the local aviation industry.

Robert Lim Joseph, president of the Save Our Skies (SOS) movement, said that while the move "looks good" on paper, it would work to the disadvantage of the country and the aviation sector.

Joseph was referring to the proposal of the Philippines-US Business Council to the government to adopt open skies on cargo purportedly to bring about an increased volume of trade and investments to the Philippines and make the country a regional hub of business. In response to the proposal, President Arroyo instructed Trade and Industry Secretary Manuel A. Roxas II to study the matter before it gets her approval.

"The proposal (open skies on cargo) may sound good on paper, specially to people not in the know, but once it is adopted and implemented, the outcome will be very different and disadvantageous to the country," said Joseph, who has a cargo forwarding business.

He said that while cargo open skies has its own merits, there are crucial issues that need to be addressed by the government before adopting it to protect Philippine interests.

"The first reality is that local carriers cannot compete with foreign airlines because the latter have an all-cargo aircraft. Local carriers do not have all-cargo planes," Joseph said.

He said, "one cannot send a volume cargo on a piecemeal basis that’s why the big airlines with an all-cargo aircraft have the advantage and their costs are much cheaper."

Joseph said other countries like the United States do not allow foreign airlines to fly domestic routes, thus it would not be viable for foreign carriers to carry cargo to these nations. "Cargo may require interior points or destinations. So if foreign carriers are not allowed to fly the domestic routes, how can they bring their shipment to interior destinations? So at the outset the Philippines is already at a disadvantage."

According to him, the Philippines has bilateral agreements with other countries on passenger and cargo services. "But the reality is that most foreign airlines are not carrying RP exports but products of their countries," he said.

"What some foreign airlines do is they tie up with RP carriers but they bring down cargo rates so that RP airlines would not earn money," Joseph said.

He added that some foreign carriers intentionally increase their cargo rates to make it less viable for exporters to ship their products via air transport.

Joseph said to make open skies on cargo feasible, a code-sharing arrangement among airlines should be allowed and that these carriers should sign a commercial agreement on cargo space and rates.

"A proper reservation system should be maintained on cargo allocation, giving priority to RP exports," he added.