Private airlines can’t compete with foreign state-controlled carriers

How can airlines that are privately-owned compete with carriers that are backed by the massive resources of the government because they are owned or controlled by the state?

This question was raised by local airline executives in view of the uneven competition in the airline industry, which is being exa-cerbated by the Philippine government’s policy of granting unjustified increases in seat capacity to some foreign airlines.

They cited as example the excessive capacity increases granted by the government to Middle East carriers, which enabled them to poach on the Philippines-Europe and Philippines-Middle East routes.

They said besides the unjustified capacity increases granted to Mideast carriers, privately-owned airlines like Philippine Airlines (PAL) are placed at a disadvantage because these Mideast airlines are owned or controlled by their governments.

They recalled that after Sept. 11 terrorist attacks in the United States, which triggered a slump in the international airline industry, these state-owned carriers were able to survive and even thrive because of the support given by their governments.

In the case of the Philippines, they added, not a single centavo was given as support to local airlines.

At least eight of the Mideast carriers are government-owned or-controlled.

These are Egypt Air, Emirates Air, Gulf Air, Iran Air, Kuwait Airlines, Oman Air, Qatar Airways and Saudi Airlines.

Published reports said among the Mideast carriers granted excessive capacity increases by the Philippine government are Qatar Airways, Kuwait Airlines, Emirates Air and Gulf Air.

Among Asian airlines, those owned or controlled by the government are Air China, Air India, Air New Zealand, Air Macau, China Southern Airlines, China Eastern Airlines, Dragon Air, Garuda Indonesia, Lao Aviation, Malaysia Airlines and Vietnam Airlines.

In Asia, among the few privately-owned airlines are Qantas Airways, Korean Air, Japan Airlines, Eva Air, Cathay Pacific Airways, Asiana Airlines, ANA Airways and PAL.