Honeyman: Is Charter change the answer?

Monday, April 25, 2011

A FEATURE of PNoy’s governance is to issue stupefying incomplete Executive Orders (EOs), wait for the brickbats from those adversely affected, and then incorporate the brickbats in the form of implementing rules and regulations (IRR).

We saw this phenomenon with E0 50. ‘PNoy gives amnesty to Oakwood Mutineers’. The AFP, understandably, had reservations about giving a free pardon to the malcontents in its ranks. These reservations where expressed through the Department of National Defense (DND). The DND then submitted its observations to Malacañang which produced an IRR which had the effect of changing the originally magnanimously forgiving EO to a policy which was much less magnanimous.

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We see the same phenomenon with EO 29 which allows foreign airlines to fly to any airport in the Philippines. ‘Open Skies’. At first sight, EO 29 breaks Rule 1 in any negotiation process which states: ‘Thou shall not give away anything without getting something in return’. Local airlines were quick to make powerful and articulate criticisms. Cebu Pacific’s Lance Gokongwei led the way with Seair President and CEO Avelino L. Zapanta and Cebu Air Vice-President Alex B. Reyes also bemoaning the lack of reciprocity associated with the Philippine government relaxing the rules for foreign airlines when foreign governments have made no changes in their relationships with airlines from the Philippines.

Gokongwei provided specifics. He quoted the existing agreement between the Philippines and Hong Kong which limits both local and Hong Kong carriers to 2,500 seats per week on the Hong Kong – Cebu route. Under EO29, Philippine carriers will still be limited to 2,500 per week but all Hong Kong carriers can now fly this route without any limit.

Last Thursday, the Civil Aeronautics Board (CAB) held a public meeting aimed at discussing EO29. The CAB used the ‘big picture’ argument. ‘It’s not reciprocity but the totality of mutual benefits that should be looked into,’ said Porvenir P. Porciuncula, CAB deputy director.

The government’s policy is aimed at increasing traffic to secondary airports and the CAB would be reviewing position papers from airlines, government agencies and other stakeholders.

We would hope that secondary airports include Bacolod-Silay. If so, there is substantial tourism benefits to be gained if there are non-stop flights from, for example, Hong Kong to Bacolod-Silay – a route that may be taken up by Hong Kong Express. This leaves Cebu Pacific’s concerns unaddressed.

The situation could be similar to a recent occurrence where, in 2008, Hong Kong Express could fly into Clark without limitations whereas Cebu Pacific was unable to compete because air rights to Hong Kong were fully utilized at that time. Cebu Pacific could not use Clark, unless it reduced its Hong Kong service from Cebu.

But the issue was eventually resolved after subsequent bilateral air talks resulted in additional air rights. It looks as though EO29, if it is to be successful, will engender more bilateral discussions without any guarantee that Philippine based carriers will be treated fairly.

Twenty years ago, Continental Airlines negotiated non-stop flights Guam – Taipei and Guam – Hong Kong. This gave a much needed boost to Guam’s tourist industry. Let us hope that EO 29 will give similar boost to our tourism. But let our airlines be treated fairly.

As Lance Gokongwei said, “Let us have Open Skies for all, not Open Skies for foreign airlines and Closed Skies for Filipino carriers.”