A high-level advisory group in the Philippines is calling for a revival of air services liberalisation initiatives following a change in government in January.

The Economic Mobilization Group (EMG), a committee under the Philippines Department of Trade and Industry which provides advice on private-sector matters, is recommending that restrictive air-services agreements be renegotiated to increase capacity entitlements. It is also calling for a second local carrier to be designated for international flights.

The EMG says its calls are made "in anticipation of increased air traffic to be brought about by renewed business confidence with the ascendancy of the newly installed Arroyo administration".

Former president Joseph Estrada was ousted in a popular uprising in January and replaced by vice-president Gloria Arroyo. Estrada's administration had been accused of having a protectionist policy which was designed to benefit struggling Philippine Airlines (PAL) but put other carriers at a disadvantage.

Calls for an "open-skies" policy were first made in the mid-1990s under former president Fidel Ramos, but those initiatives were scrapped under Estrada, who is closely tied to PAL chairman and majority owner Lucio Tan.

The EMG says its recommendations are in line with a liberalisation measure known as Executive Order 219, which was signed by Ramos in 1995.

Trade and industry undersecretary Erenesto Ordonez, chairman of the EMG's Technical Working Group, says carriers from Singapore, South Korea, Germany and the Netherlands are using 100% of their capacity entitlements. Those from Taiwan, Hong Kong and Japan have used 88%, 85% and 79% of their respective entitlements.

"The EMG, through these recommendations, opted for a policy of continued, rationalised progressive liberalisation of the nation's skies, instead of an immediate full-blown open-skies policy. This gives local carriers time to adapt to fierce competition by foreign airlines and to allow for vital air transport facilities to go on-stream," says Ordonez.

Its recommendation to allow multiple-carrier designations in air services agreements will most likely benefit growing domestic operator Cebu Pacific, which has long had international aspirations. The Philippines previously designated a second carrier for international passenger services, Grandair, but it ceased operating two years ago.

Source: Airline Business