SO THE PUBLIC MAY KNOW

(The truth about RP-Taiwan aviation issue)

NOTE : The below statements are produced by Philippine Airlines and any opinions or facts stated are not necessarily those of ASIA Travel Tips.com or any of its employees. TravelNewsAsia.com cannot be held responsible for any inaccuracies herein.

Philippine Airlines wishes to fly back to Taiwan under a mutually beneficial and internationally accepted way: thru bilateral agreement.

In the current RP-Taiwan aviation dispute, PAL is caught in a myriad of irrelevant issues raised by groups of well-funded lobbyists.

They have exerted all efforts to make the issue even more contentious. PAL’s detractors have concocted nonsensical side issues to sow confusion and disagreements.

The minor air row is blown out of proportion. Even the Philippine Government, a strong advocate of globalization, is now accused of protectionism.

Thus, PAL wants the following issues clarified:

ALLEGATION:

PAL does not want to operate to Taiwan and is blocking the renewal of an RP-Taiwan air agreement.

· In truth, the RP-Taiwan market is valuable to PAL and to the nation as a whole. PAL was the biggest carrier of Taiwanese tourists to RP. PAL was de facto official carrier of Filipino OCWs to and from Taiwan.

· The issue erupted when Taiwanese carriers were asked by RP to stop violating aviation rules by carrying RP-US traffic (passengers in Manila bound for U. S. and vice versa) without securing air rights.

· Rather than give up the illegal RP-US traffic, Taiwan persisted and used its economic might to have its way. Thus, the impasse.

ALLEGATION:

PAL cannot compete with the Taiwan carriers that offer better services and lower prices.

· The fact is, PAL was market leader in the RP-Taiwan traffic, beating the Taiwanese carriers, airline for airline.

· Along with its improved service and newer planes, PAL offered lower RP-Taiwan fares (as China Airlines and Eva Air admit).

· It was in countries like the U. S. and the Middle East where PAL was losing to the Taiwanese airlines. Reason: Taiwan resorted to “price dumping” by charging fees much below operational cost (more than 50% off the normal fare) to kill competition.

· Thus, Taiwan’s illegal RP-U.S. traffic was made worse by cutthroat competition.


ALLEGATION:


PAL is pushing for monopoly on the US route.


· PAL is too tiny to drive away the U. S. mega carriers.


· PAL flies 19 times weekly to the US. Two US carriers -- Northwest Airlines and Continental Micronesia -- have a combined 27 flights per week. Northwest alone flies 18 flights weekly.

· On a much wider scope, there are over 35 other foreign airlines flying into and out of the Philippines. For domestic sectors, there are two other RP carriers and a number of smaller airlines. Certainly, this is not a monopoly.

ALLEGATION:

PAL is blocking access by foreign carriers to the Philippines, which is why they cannot use their entitlements.

· On the contrary, PAL has asked foreign airlines to serve RP destinations. Examples: Cathay Pacific is now operating Cebu-Hong Kong; PAL has encouraged Qantas to operate Davao-Darwin and to serve Cebu; PAL supports Bouraq’s Davao-Manado route (which, sadly, the Indonesian carrier will drop on Sept. 29, 2000 for lack of traffic).

· PAL even supports the “open sky” prevailing in the BIMP-EAGA (a regional grouping of Brunei, Indonesia, Malaysia and the Philippines dubbed as the East Asian Growth Area). But no takers.

· PAL also asks Japan to operate direct Cebu-Japan regularly. Japan Airlines is not interested.

ALLEGATION:

PAL is asking for government protection while the world goes for liberalization or Open Skies.

· PAL rejects “protectionism” or “open skies” and is for progressive liberalization.

· It only asks that government does its lawful duty of safeguarding local businesses from violations by its foreign competitors in terms of dumping, cutthroat pricing, and economic sabotage.

· In “open sky”, or aviation free-for-all, the mightiest (like the US giant carriers) rule the skies. The small carriers (like RP carriers) perish.

· Over 200 member countries of the International Civil Aviation Organization (ICAO) and the World Trade Organization (WTO) have rejected “open sky” and have adhered to bilateral concept of trading air traffic rights. RP is one of these countries.

ALLEGATION:

PAL is not denied by foreign countries/airlines when it wants to operate into their respective countries. Why does it deny foreign airlines?

· Actually, PAL has a long list of rejections by foreign countries/airlines for more seat offerings or additional flights.

· Here are some countries that rejected PAL services: Japan, Thailand, Italy, UK, Indonesia, Saudi Arabia, US and others.

· PAL had to pay US$1.5 million annual royalty to British Airways for the right to carry traffic between UK and Australia via Manila. This happened after UK unilaterally abrogated the RP/UK air treaty over this issue.

· These countries, who were merely pursuing self-interest, were never accused of protectionism. Why accuse RP now?

ALLEGATION:

PAL position in the RP-Taiwan row affects tourism and OFWs.

· PAL has always been the real carrier of tourists and OFWs between RP and Taiwan because all its seats are dedicated to them.

· The Taiwanese carriers were not serving the tourists and OFWs between RP and Taiwan. Why? Because their seats were dedicated to the Balikbayans between US and RP, and OFWs between RP and Middle East, which hardly benefit RP tourism.

· Despite the stoppage of flights between RP and Taiwan, PAL continues to service the OFWs by flying them via Hong Kong and charging them the same fare it would have charged on the direct RP-Taiwan flights.



PAL reiterates its willingness to fly again to Taiwan -- for flying legally is our business; and PAL wants to serve the public unhampered -- for it is a corporate commitment.

In conclusion, PAL wants to reiterate its sincerity in supporting the rebuilding of aviation ties between the Philippines and Taiwan. Small beginnings can be made: respecting the rules, mutual give and take, and extending a hand of friendship.

PHILIPPINE AIRLINES