CAAP Allows Air Pact Violations If They Are Not Abused

The Civil Aeronautics Administration of the Philippines (CAAP) appears to be deaf and blind to the objections of members of the House of Representatives in allowing more landing rights in the Ninoy Aquino International Airport (NAIA).

In their letter to Carmelo Arcilla, executive director of the Civil Aeronautics Board, the lawmakers declared “it has been revealed in various public hearings that NAIA has reached its full capacity and any additional accommodation during its peak operating period will only further narrow the window for aircraft movements and thus, will become a safety issue.”

The bigger question of the airline industry in the Philippines is non-reciprocity in the bilateral agreements with airlines of other countries.  In past years, civil authorities have been giving additional seat capacities to other airlines landing in NAIA. The CAAP refuses to demand reciprocal rights.

Airlines in the Philippines do not get the reciprocity in terms of additional passenger seats and more landing rights. Philippine Airlines (PAL), and lately Cebu Pacific, have been on the receiving ends of bilateral agreements.

Civil authorities in the Philippines allow competitors to land in Manila and pick up passengers for other destinations. PAL and Cebu Pacific, on the other hand, operate point to point.

Airlines in the Middle East fly to Manila and pick up passengers for other destinations, mostly the United States. These passengers would be forced to take PAL if its competitors are not allowed to fly to a third destination instead of flying back home.

PAL told Business Insight “the UAE (United Arab Emirates) gives Emirates Airlines and Etihad Airways greater and more enormous advantages in scooping up more ‘sixth freedom’ passenger (air) traffic.”

Since the two Arab airlines fly to Manila and pick up passengers for another destination, they are not in the business of flying from home to Manila and back to home. PAL claimed they make more money flying passengers from Europe to Manila or from Saudi Arabia, a separate independent Middle East country.

PAL claims these operations are not allowed under the agreement but is tolerated (by civil authorities) as long as Emirates Airlines and Etihad Airways do not ‘abuse’ the privilege.

The proof of abuse is precisely “violating the agreement” by flying passengers picked up in Manila while PAL flies back home from UAE.  PAL is limited to point-to-point operation as specified in the agreement.

Civil authorities in the Philippines do not consider flying passengers from Manila to Europe and elsewhere a violation of the agreement. Or they do not demand the same rights for PAL.

Government argues PAL should have more aircraft to be entitled to reciprocity. PAL shoots back to claim it cannot buy more airplanes if it is denied revenues given to passengers of its competitors.

PAL has ordered 70 new long-haul airplanes. Thirty of them have been delivered. Five will come every year.

In spite of being denied passengers by CAAP, PAL made consolidated profits of $20.376 million in 2014.  It flew more than 50 million passengers in its local and foreign routes.

Source: Amado P. Macasaet,

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