PAL, CEB urge gov’t to resist UAE pressure

With the Philippines and the United Arab Emirates (UAE) air talks scheduled this week (August 27-28, 2015) in Manila, both flag carriers are “strongly urging” the government “to resist any pressure to grant unfair advantage to UAE carriers”.

In a joint statement issued yesterday, Philippine Airlines (PAL) and Cebu Pacific (CEB) maintained that the state should not give in to UAE demands for “unjustified and unnecessary disruptive additional rights to serve Manila."

The flag carriers likewise cautioned the government to "increase its vigilance against anti-competitive practices and any attempts to distort competition"; and "challenge UAE and other Middle Eastern airlines to put up direct flights to emerging new gateways in Luzon, Visayas and Mindanao", instead of further saturating the already congested Ninoy Aquino International Airport (NAIA).

Any request from UAE for additional entitlements to Manila has been deemed unnecessary because the supply of airline seats is well in excess of actual demand for the Philippine-UAE market, according to the joint statement signed by PAL President Jaime J. Bautista and Cebu Pacific President Lance Gokongwei.

The grant of more flights will provide undue advantage to the government-owned and state-subsidized UAE carriers.

According to a 2015 US aviation industry report, UAE airlines enjoyed as much as $23 billion in subsidies from their government.

PAL and CEB also said the air talks should not even be held until all available entitlements to UAE are utilized by Philippine carriers. Entitlements for carriers of the two countries were recently increased significantly.

The local carriers also pointed out that when Turkish Airlines, Ethiopian Airlines and Oman Air started flying to Manila, they did not pose any objection "as we are not afraid of competition".

The Philippine negotiating panel should understand that granting UAE carriers additional entitlements would "deepen their significant unfair advantage in the marketplace which would result to distorted competition."

For its part, Emirates last week maintained that “The allegations of subsidy and unfair competition leveled by the big three US legacy carriers Delta, United and American Airlines is completely false.”

“We have recently released a point-by-point, fact-based response that systematically disproves these allegations,” according to a statement released by an unnamed Emirates spokesperson to the media last week.

“For the last 25 years, Emirates' unwavering commitment to the Dubai-Manila route has been a catalyst for growth in the UAE-Philippine bilateral trade and tourism to the Philippines,” the statement continued.

Since the removal of the third daily flight, Emirates’ two daily flights on the Dubai-Manila route have been operating at 100 percent capacity in Economy Class on most of the flights – with no seats left for international tourists and Overseas Filipino Workers (OFWs), Emirates argued.

“This represents a significant gap between supply and demand for seats. Taking this into consideration, we are confident that the restoration of Emirates’ third daily flight to Manila will ensure widespread and sustained benefits to all stakeholders,” Emirates insisted.