Nicholas Ionides ATI SINGAPORE The Philippine Government has come under attack for growing protectionism in its air services policy, but mounting criticism appears only to have toughened its stance.

Accusations of protectionism were lodged by Taiwan in July when its national carrier, China Airlines (CAL), was hit with a 30-day ban on Hong Kong-Manila flights by the Philippine Civil Aeronautics Board (CAB).

The CAB said the ban was a penalty for carrying more passengers between Taipei and Manila than a three-year-old air services agreement allowed for. CAL was also accused of using Boeing 747s instead of Airbus A300s and Boeing 737-800s, which the CAB said were the only types it was allowed to operate into the country.

CAL immediately fought back, arguing that it never exceeded the number of passengers allowed and that, on the rare occasions when 747SPs were used, it restricted the number of seats sold on them. CAL also said it had sought written approval from the CAB to switch aircraft types and had proceeded to make the changes only after no reply had been received.

In response, Manila cut the operational penalty to 15 days but this did not please CAL or its civil aircraft authority, which charged that the CAB was penalising CAL to protect struggling Philippine Airlines, which has been in receivership since the middle of last year and envies the success of the Taiwanese airlines.

The dispute worsened on 30 July at the end of a two-day round of air services talks in Manila, with the Philippine side giving 60 days' notice of the termination of the 1996 air services agreement. Taiwan has been backed in the dispute by the Association of Asia Pacific Airlines, which, in a veiled criticism of the CAB, has publicly called for a further liberalisation of the region's air transport market.

For several months, the board has been threatening to withdraw the operating rights of carriers accused of violating air services accords and has already forced Emirates to halt services between Hong Kong and Manila. A senior CAB source says criticism will not force the board to back down and that other carriers, including those from South Korea, Hong Kong and China, are on its "hit list" as part of a full review of Manila's 26 air accords with other countries.

The CAB says many of its agreements - negotiated by the government of former Philippine president Fidel Ramos - are "unfair" and need to be reviewed. A new government, led by president Joseph Estrada, took office in mid-1998. Estrada is a close friend of PAL's majority owner, Lucio Tan.

Source: Airline Business