DAVE KNIBB SEATTLE Talks between the Philippines and Taiwan to resolve the dispute over air services between the countries collapsed in December just as a solution looked close. As a result, Taiwan barred charter flights by three of its carriers to the Philippines and no new talks are planned.

The talks started in Taipei soon after all scheduled services between the Philippines and Taiwan were halted. Taiwan's civil aviation authority (CAA) says that the delegation from the Philippine Civil Aeronautics Board (CAB) left the latest round empty handed.

The dispute began after the Philippines accused Taiwan's carriers of violating the terms of their air services agreement, signed in 1996. Manila cancelled the agreement, forcing scheduled flights by Philippine Airlines (PAL), China Airlines (CAL) and EVA Airways to be halted from 2 October.

The CAB had demanded a new agreement allowing fewer passengers to be carried per week by each country's carriers. Taiwan refused, accusing the CAB of seeking to punish CAL and EVA to protect PAL, which has been in receivership since mid-1998 with debts of more than $2 billion.

In early November the dispute seemed close to a resolution, when the Philippines said it was willing to recognise the agreement again. It has since become clear, however, that it is only willing to do so if Taiwan accepts changes.

Following the mid-December talks, Taiwanese carriers Far Eastern Air Transport, U-Land Airlines and UNI Air - which had operated charter flights to Cebu, Laoag and Subic Bay in the Philippines - were told by Taiwan's CAA to cease all services by 31 December.

The CAA's branch chief for international affairs, Betty Cheng, says flights have ended because no resolution to the dispute is in sight.

Source: Airline Business