EU ban darkens Philippine skies
By Jennee Grace U Rubrico
MANILA - A European Commission decision to ban Philippine carriers
from European airspace, which took effect on April 1,
threatens to undermine the country's crucial tourism
sector.
The prohibition, the most recent in a
series of problems for the Philippine aviation
industry over the past two years, was issued on the basis of safety
assessments by the International Civil Aviation
Organization (ICAO) in September 2009 and the
downgrade of the country's safety rating by the US
Federal Aviation Administration (FAA) in 2008.
In a statement, the 27-member European Commission said that it had been
in constant communication with Philippine regulatory
bodies prior to reaching its decision, and
acknowledged efforts of the two-year-old Civil Aviation Authority of the
Philippines
(CAAP), the new regulatory body that was formed after
the dissolution of the Air Transportation Office, to
reform the country's civil aviation system.
It
also recognized measures taken by the two biggest airlines of the
country - Philippine Airlines and Cebu Air - to better
ensure aircraft safety. These efforts, however, did
not prevent the community from adding Philippine airlines
to its blacklist.
EU ambassador Alistair
MacDonald said: "The commission considers that the
supervisory authority is currently not able to implement and enforce the
relevant safety standards, and decided therefore to
ban from EU airspace all air carriers licensed in the
Philippines until these deficiencies are corrected."
The head of the CAAP, Alfonso Cusi,
acknowledged the reasoning for the EC's decision, but
said that it was based on outdated information. "There has been
no audit after the FAA downgrade two years ago. Then there was
an ICAO audit. The EU was acting on findings of ICAO
but that was still in October," Cusi said.
Cusi, who assumed his post last month, said that the
concerns raised by the EC included monitoring of
airlines' business processes to check whether they are
on par with international standards. "The question is how we check it.
There must be a process that is acceptable. There must
be manuals, systematic procedures. They [European
Commission] did not see this," he said.
What
the European Commission weighed were processes used by the Philippine
civil aviation regulators two years prior, which were
then deemed unsatisfactory. "Now, we want to show them
that [the reforms are] here. We want to correct the
impression," he said, noting that the CAAP has reiterated a
request that the EC visit the country in May to check the progress
of recent reforms.
No
carrier licensed in the Philippines at present services Europe, so
technically the ban does not affect any Philippine
airlines' revenues from ticket sales. Industry
players, however, note that the repercussions of the
EC's preemptive restrictions are far-reaching and damaging both to
Philippine carriers and the country.
Aviation industry analyst and Asian Institute of Management (AIM)
associate professor Wilfred Manuela said that because
the ban is on Philippine-licensed airlines, the
reputation of local airlines is at risk.
"If a
country's civil aviation authority appears not to be implementing what
the ICAO requires ... the validity of the
certifications issued by the civil aviation authority
to airlines is now in doubt," he said. "Perhaps even local
passengers will now entertain some doubts regarding the safety of
local carriers."
Cebu Air,
which operates Cebu Pacific flights to other Asian destinations,
claims to have a fleet with an average age of 17 months while
Philippine Airlines' planes are reportedly eight
years old on average.
Tourism deterrent
The EU ban may also erode tourist arrivals and eventually airline
revenues, analysts say. In 2008, when the FAA
downgraded the safety ratings of the country to
Category 2 from Category 1, the US Embassy issued a travel advisory
discouraging its citizens in the Philippines from using
local airlines.
Category 2 indicates that the
FAA had assessed that the Philippines' civil aviation
authority had failed to comply with ICAO safety standards for the
oversight of air carrier operations. While in Category 2,
Philippine air carriers are permitted to continue
current operations to the US under heightened FAA
surveillance.
"Whenever possible, Americans
traveling to and from the Philippines should fly to
their destinations on international carriers from countries whose civil
aviation authorities meet international aviation
safety standards for the oversight of their air
carrier operations under the FAA's International
Aviation Safety Assessment (IASA) program," the advisory stated.
Philippine Airlines, the only local carrier that
services the US, was badly affected by the US advisory
since the US market, with its huge population of
Filipinos, contributed 30% of its revenues. Expansion plans were also
put on hold until the Category 2 classification could
be lifted.
While the European Commission ban
would not have a direct impact on Philippine-licensed
carriers, the reputational hazard could be costly.
Europeans who come to the Philippines for business or tourism are
expected to stay away while the ban is in place.
Tourist destinations in the Philippines are generally
reached through transfers from international airports.
Since only Philippine-licensed carriers service domestic routes, an
advisory that discourages European and American
citizens from using local carriers could prevent them
from visiting the country altogether and severely impact the
tourism industry.
"Since the
Philippines does not allow foreign airlines to pick up passengers
from gateway airports to other domestic destinations,
visitors are forced to take local airlines. They may
stop coming to the Philippines if they start to
entertain the idea that local airlines are unsafe," said AIM's Manuela.
"For European tourists who have taken local
flights before, this may not be a problem. For those
visiting the Philippines for the first time, either they
ride at their own risk or cancel their travel plans to the
Philippines altogether," said Manuela. "I don't think
they would ride at their own risk."
The local
tourism industry is already feeling the heat. Tourism Secretary Ace
Durano said that European insurance companies have stopped
covering travelers for domestic air travel in the
country, leading to the cancellation of bookings for
April to August to the Philippines by travel operators from Germany, the
United Kingdom and France. Figures from the National
Statistics Coordination Board show that European
visitors made up 10% of the total tourist arrivals in
the Philippines in 2008.
Code-sharing
arrangements between Philippine-registered airlines and
international carriers may also be jeopardized by the EC's decision to
blacklist local carriers. Philippine Airlines has
code-sharing arrangements with airlines of the Gulf
States for Middle Eastern destinations, to which
around half of the more than one million
Filipino overseas contract workers are deployed each year.
These destinations are also used as transfer points for passengers
going to Europe from the Philippines. "If the Gulf
States think that the EU ban has any merit, they might
take a second look at the code share agreements with
Philippine Airlines. If they are convinced that the EU ban is credible,
they might suspend or withdraw code share agreements,"
said Manuela.
Other civil aviation bodies may
also take their cue from the European Commission, in
the same way the bloc took its cue from the FAA and the ICAO,
and institute a similar ban on Philippine-based airlines in
their airspace. Manuela, however, noted that the FAA
was not likely to impose harsher measures for US
routes given that the agency has not taken further adverse actions in
the two years since it downgraded the Philippines to
Category 2.
The government is in
damage-control mode. Cusi said that as soon as the
European Commission advisory came out, his CAAP got in touch with other
aviation authorities to assure them that the concerns
of the European bloc are already being addressed.
"Immediately after the advisory came out, we wrote
to the authorities in the other countries and parts
of the region informing them that we are safe. For
instance, we wrote to IOSA [IATA Operational Safety Audit] to let them
know that our airlines are very compliant. They said
they understood. So far I think we're holding on," he
said.
Jennee Grace U Rubrico has been a journalist for over 10 years.
(Copyright 2010 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about
sales, syndication and
republishing.)
