Open skies policy harmful to Pinoy airlines!

Exactly a week ago we attended a presscon hosted by Philippine Airlines (PAL) for Cebu media to meet with new PAL vice president for corporate communications Joey G. de Guzman, editorial consultant Jonathan P. Gesmundo, PAL assistant vice president for sales and services Glenn D. Vallecera, and PAL spokesperson Ma. Cielo Villaluna. They gave us a bird’s eye view of what was really happening within PAL, especially with regards its troubles with its labor union.

I’ve read enough articles about PAL’s labor dispute that only reveal that the airline’s union officers are pushing for that strike because their very existence depended on it. The PAL management wants to reduce its number of employees from the current 7,000 to half by outsourcing many of its allied businesses. Some of these would be its food catering services and call center, which can easily be outsourced locally.

I recall that back in 2000, PAL’s maintenance company, Lufthansa Technik, was spun off and today this former PAL company is doing well, not only because it continues to maintain PAL’s fleet of aircraft, but it does maintenance work for other airlines as well. I visited this maintenance facility a year ago and I was surprised to find two Virgin Airways aircraft undergoing maintenance checks.

Clearly the problem plaguing PAL stems from those employees who would be retrenched. As expected, union officials more often than not don’t care if PAL crashes again for as long as they get what they want. But if you’ve been reading the horror stories happening in the airline industry around the world, you will see that most of these airline companies are in various states of trouble, thanks mostly to a serious drop in passengers, aggravated by record fuel prices. Even Singapore Airlines is experiencing similar problems as reported in Channelnews Asia. Let’s hope that PAL would solve its labor problems and look forward to a better future.

But then, our radar screen tells us that the future of the airline industry in the Philippines is headed for stormy weather and this doesn’t only include PAL, but Cebu Pacific Air (CEB) and AirPhil as well. That storm comes from the recently issued Implementing Rules and Regulations (IRR) guiding the so-called “open skies policy” as ordained by Executive Order 29 signed by President Benigno “Noynoy” Aquino III.

As I mentioned before, 25 years ago I advocated for an open skies policy because back then, PAL was the only airline flying across the Philippine archipelago and therefore, a monopoly. In those days, the number of tourists who came to our shores depended solely on the number of seats that PAL could fill its planes. But with CEB and AirPhil already flying their domestic and international routes, we must seek ways to keep these airlines and this is why I changed my mind and no longer believe that we should promote an open skies policy.

In last week’s presscon, we asked PAL to comment on the open skies policy but Joey de Guzman told us that PAL already said more than enough against this policy and would prefer that the other players in the industry speak out. Well, this is exactly what we got from CEB chairman Lance Gokongwei, who issued a statement that Cebu Pacific can compete with foreign carriers if given a “level-playing field” through equal and reciprocal traffic rights. I fully subscribe to Gokongwei’s thoughts. I mean, why should a foreign airline be given equal rights and opportunities in our own country to compete with our local airlines, when their own governments would not return the favor to our domestic carriers?

The Civil Aeronautics Board (CAB) has already given entitlements to a host of foreign airlines to fly to Philippine destinations either in the Ninoy Aquino International Airport (NAIA), the Mactan Cebu International Airport Authority (MCIAA) and other destinations in this country. What CAB ought to do is press upon these airlines to serve the routes that they have requested. Until the CAB does this, having an open skies policy would make it difficult for our local airlines to survive.

Perhaps the Aquino administration has been too hasty in approving an open skies policy because for many years, our current Tourism Secretary Alberto Lim belonged to the group espousing “Freedom to Fly.” As Lance Gokongwei pointed out, “With reciprocal open skies, CEB as a homegrown Philippine flag carrier will have the opportunity to offer its Filipino brand of service and trademark low fares to the Asia-Pacific region. Sadly the current IRR of EO 29 denies that option.” If P-Noy is pro-Filipino, then he should immediately put the brakes on EO 29 as this policy is detrimental to our Filipino-owned airline companies which must survive in this highly competitive global environment.

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For e-mail responses to this article, write to vsbobita@mozcom.com or [email protected]. Avila’s columns can be accessed through www.philstar.com.