NEWSFLASH

AIR PACTS WITH HK, KOREA, SINGAPORE FOR REVIEW

Manila, July 10, 2000 - The Philippine government is set to review and renegotiate the country’s air service agreements (ASA) with South Korea, Singapore and Hong Kong because of alleged violations of some provisions.

Flag carrier Philippine Airlines (PAL) is leading the group poised to “review” the ASA with the three major destinations which will hit carriers like Korean Air Lines, Singapore Airlines and Cathay Pacific.

The review aims to balance air seat capacity distortions. PAL is going into the review with the full support of the Civil Aeronautics Board (CAB).

Meanwhile, Singapore Airlines and Cathay Pacific are reportedly paying PAL for their unused entitlements to selected destinations. Freedom to Fly Coalition vice chairman Narzalina Lim said the two foreign carriers pay PAL $50 per seat if they want to increase their capacity.

“They pay PAL, not the government,” she alleged.

The looming CAB and PAL review, according to the coalition, would create friction due to loss of investments as well as lost income from tourism-related opportunities similar to what happened when direct flights were cancelled between Taiwan and the Philippines during the disastrous ASA row.

“It is a disgrace that our air policy is dependent only to what PAL wants, ” Lim added.

PAL had complained that China Airlines and EVA Air were stealing its trans-Pacific customers by carrying them from Manila through Taipei and on to the United States, which PAL said was a “sixth freedom right” violation.

A policy paper report by the Center for Research and Communications said the 1944 Chicago convention defined only five freedoms (or restrictions) of the air which became the basis for bilateral air agreements. The term sixth freedom, on the other hand, has been loosely used within the airline industry to describe the combination of rights by an airline to carry traffic.