Favila welcomes entry of low-fare air carriers

Trade and Industry Secretary Peter B. Favila welcomed yesterday the entry of low-cost air carriers even as Philippine Airlines (PAL) is complaining about the chartered international passenger operations of two foreign airlines.

Following his speech at the 31st Philippine Business Conference at the Manila Hotel, Favila welcomed the entry of low-cost airlines and the increase in tourism that it will bring to the country.

"Competition is healthy. It leads to better efficiency," Favila said.

However, Favila said the entry of low cost carriers in the airline industry is the call of the Civil Aeronautics Board (CAB).

The CAB is currently studying the petition of a new low-cost carrier Thai AirAsia of Thailand to offer chartered flights from Bangkok/Macau/Clark from Oct. 15 to Nov. 15.

PAL fears that AirAsia, along with the Singaporean-owned Tiger Airways which is already operating out of the Diosdado Macapagal International Airport (DMIA) in Clark, Pampanga, aims to cannibalize passengers from PAL’s lucrative Manila-Hong Kong route.

Macau, PAL contends, is positioning itself as an alternative gateway to Hong Kong and the rest of China since its is a short ferry ride away.

Tiger Airways, particularly, PAL has accused, is using 7th freedom rights and is thus violating the Philippine-Singapore Air Services Agreement.

Tiger Airways, PAL claims, is selling the Macau-Singapore route separately and independently from its suppose Singapore/Macau/Clark/Singapore route.

PAL’s complaint, however, is also not supported by tourism officials and practitioners in Clark who argue that the presence of the low cost carriers has increased tourism-related activities in Clark and Angeles City and is thus economically beneficial.