Local and other foreign carriers may cease operations between Manila and Dubai and Europe, if Middle East airlines succeed in securing new entitlements in the forthcoming bilateral air talks with the Philippines, Philippines Airlines said over the weekend.
“Should the UAE airlines get the additional entitlements they seek during the coming Philippine-UAE air talks, this will undermine the investments PAL and other airlines have made for the country in opening new routes to serve Philippine tourism and overseas Filipino workers,” PAL president and chief operating officer Jaime Bautista said.
The Philippine air panel and its counterpart United Arab Emirates are set to hold air talks on August 27 to 28 at the headquarters of the Civil Aeronautics Board.
At risk is the healthy state of competition in the Philippines’ global aviation network, after PAL launched vital new routes to London in 2013, New York in March this year, Abu Dhabi in 2013, Dubai in 2013, and Riyadh and Dammam in 2014.
Other Philippine and European airlines have opened their own routes to Dubai, Kuwait, Riyadh, Doha and Istanbul, which are vulnerable to another ill-timed onslaught by Emirates Airlines and Etihad Airways if the UAE government secures increased frequencies between Manila and the UAE.
PAL said it was ready to compete on a level playing field. The Middle East and Europe routes, however, are unique because the competitive field is distorted by the massive subsidies enjoyed by Gulf carriers such as Emirates Airlines and Etihad.
PAL stopped flying to the United Arab Emirates in 1997, to Europe in 1998 and to Saudi Arabia in 2006 due to unfair competition, mainly because of massive and well-funded efforts by Mid-East carriers to siphon passenger traffic via their hubs in Dubai, Abu Dhabi and other airports in the Gulf region.
Six European airlines also suspended their routes to Manila during the same period as Mid-East carriers employed their multi-million-dollar advantage to devastating effect.
In 2014, Emirates cancelled its Dubai-Clark route in anticipation of receiving permanent additional entitlements to the congested Ninoy Aquino International Airport. Emirates was also penalized by the Civil Aeronautical Board in December 2014 for selling without prior authorization flights that exceeded their weekly maximum entitlement.
Emirates and other Mid-East carriers have been lobbying for more flights into Manila in order to carry passengers to destinations beyond the UAE.
When PAL and European carrier flights to the Middle East and Europe stopped in 1997, the monopoly of air service enjoyed by Mid-East airlines led to higher air fares and constrained the growth of European tourists visiting the Philippines.
“We respectfully call on the Philippine panel to the air talks to promote fair competition and support our airlines who have invested much in re-opening service to the Middle East and Europe,” Bautista said.